Ronald Dwight Kunde v. Estate of Arthur D. Bowman and Diane Engelkins ( 2018 )

IN THE SUPREME COURT OF IOWA
No. 17–0791
Filed November 2, 2018
RONALD DWIGHT KUNDE,
Appellant,
vs.
ESTATE OF ARTHUR D. BOWMAN and DIANE ENGELKINS,
Appellees.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Jackson County, Nancy S.
Tabor, Judge.
The parties seek further review of a decision by the Iowa Court of
Appeals affirming the district court’s dismissal of the plaintiff’s unjust
enrichment and quantum meruit claims and reversing the district court’s
dismissal of the plaintiff’s promissory estoppel claim. DECISION OF
COURT OF APPEALS VACATED; DISTRICT COURT JUDGMENT
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
D. Flint Drake and Samuel M. DeGree of Drake Law Firm, P.C.,
Dubuque, for appellant.
Bradley T. Boffeli of Boffeli & Spannagel, P.C., Maquoketa, for
appellees.
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APPEL, Justice.
In this case, a farmer sued his neighbor’s heirs, claiming, among
other things, that he and the decedent entered into an option contract to
purchase farmland that was subject to a written lease and upon which the
farmer made substantial improvements at his expense. In the alternative,
the farmer sought to recover under various equitable theories of
promissory estoppel, quantum meruit, and unjust enrichment.
A jury found in favor of the plaintiff on his contract claim and
awarded damages. After the verdict, however, the district court granted
the defendants’ motion for a directed verdict on the contract claim. The
district court refused to order a new trial on the plaintiff’s alternative
equitable theories.
On appeal, the court of appeals affirmed the directed verdict on the
contract claim but remanded the case to the district court for a trial on the
equitable claims. On remand, the district court granted the defendants’
motion for summary judgment on the equitable claims.
On a second appeal, the court of appeals again reversed the
judgment of the district court. The court of appeals found that the claims
of unjust enrichment and quantum meruit failed as a matter of law
because the parties had express agreements governing improvements to
the leasehold and allocating the expenses of the improvements. On the
claim of promissory estoppel, however, the court of appeals concluded that
the presence of agreements related to the leasehold and improvements was
not determinative. Instead, the court of appeals reasoned that what was
required to give rise to a claim of promissory estoppel was not an
“agreement” but a “promise.” As a result, the court of appeals reversed
the district court and remanded the matter for a new trial.
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We granted further review. For the reasons expressed below, we
vacate the decision of the court of appeals, affirm the district court’s
dismissal of the unjust enrichment and quantum meruit claims, and
reverse the district court’s dismissal of the promissory estoppel claim.
I. Procedural and Factual Background.
Viewed in the light most favorable to the plaintiff, the summary
judgment record shows the following facts. Ronald Kunde purchased
farmland along with a residence in Jackson County in 2000. He bought
additional ground in 2007. Kunde’s farm was adjacent to a 102-acre farm
owned by Arthur Bowman.
Kunde and Bowman were neighbors who engaged in an occasional
“hello” and brief discussion concerning farming practices. At trial, Kunde
testified that in the fall of 2007, Bowman approached Kunde and asked if
he would be willing to rent his farm. Kunde responded by asking whether
Bowman’s wife would rent or sell farmland she owned. Bowman told
Kunde that his wife’s property had been sold but that Bowman would
consider selling his own property for $1900 per acre. Kunde testified he
told Bowman that the figure was too low and the parties agreed on a price
of $3000 per acre. Kunde told Bowman he wanted to talk with his brother
about the transaction. Bowman told Kunde that he could rent the farm in
the meantime and that he could purchase the property at his option.
The parties discussed the possibility of improvements to Bowman’s
property. Kunde agreed to make certain improvements to the property as
part of the oral agreement that Kunde could exercise an option to purchase
the Bowman land.
Kunde and Bowman entered into a written lease to rent the farm for
the 2008 farm year. Kunde made a list of improvements he had discussed
with Bowman, and at his request an addendum was added to the 2008
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farm lease. The addendum stated that the improvements would be
permissive and at renter’s expense. The parties executed other leases in
2009, 2012, and 2013 under terms generally similar to those in the 2008
lease.
The leases were prepared by an attorney for Bowman. The leases
contained provisions related to improvements by the lessee. Paragraph 4
provided that all commercial fertilizer and other inputs and expenses were
to be paid 100% by the tenant. Paragraph 14 related to new improvements
and provided that all buildings, fences, and improvements that may be
erected by the tenant constitute additional rent and shall inure to the real
estate and become property of the landlord and that expenses incurred
without landlord consent were the responsibility of the tenant. Paragraph
21 provided that changes in lease terms could only be made in writing.
During the period of time when Kunde leased the Bowman property,
he made substantial improvements to the land. He banked expensive
fertilizer in the soil, excavated and leveled the property, installed drain tile,
engaged in general cleanup, repaired and installed fences, and created and
redirected waterways. Kunde’s work also converted twenty-three acres of
nontillable acres to tillable acres.
Kunde asserted that he incurred $52,000 in cost for his labor,
equipment use, and materials in making the improvements. He claimed
that when he discussed the improvements with Bowman, Bowman told
him that Kunde could do whatever he wanted since the farm would be his.
Kunde claimed he made the improvements in reliance on Bowman’s
promise that he would be able to buy the farm. Several witnesses at trial
testified that improvements adding tillable acres to farm property would
typically be the responsibility of the landlord.
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In 2010, Kunde attempted to exercise his option to purchase the
Bowman farm. Kunde was told by Bowman’s daughter, Diane Engelkins,
that she had discovered a third-party right of first refusal on the farm.
After Kunde was told of the right of first refusal, Bowman told Kunde, “I
feel like I lied to you.”
In August 2013, Bowman was placed in a nursing home, suffering
from dementia. Kunde was served with a notice of termination of the farm
tenancy. In November, Engelkins informed Kunde that the farm was being
placed for sale at a public auction due to the fact that it was Bowman’s
only asset and he needed it to be sold in order to meet Title XIX
requirements. The farm was ultimately sold.
Kunde brought an action in district court against the defendants.
He claimed that the defendants breached an option contract to sell him
the agricultural land. Alternatively, Kunde alleged equitable causes of
action, including promissory estoppel, unjust enrichment, and quantum
meruit. The case proceeded to jury trial, with the jury rendering a verdict
in favor of Kunde on his contract claim and awarding damages of $52,000.
After the verdict was rendered, the district court granted a motion
for directed verdict on the grounds that there was insufficient evidence to
prove the existence of a contract. The district court denied plaintiff’s
motion to reconsider, motion to amend and enlarge findings, and motion
for a new trial on Kunde’s equitable actions. Plaintiff appealed.
The court of appeals affirmed the ruling of the district court that
Kunde failed to offer substantial evidence to support the jury’s finding that
Kunde and Bowman reached an agreement on all the essential terms of an
option contract. The court of appeals, however, reversed the decision of
the district court denying Kunde’s request for a new trial on his equitable
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claims. The court of appeals remanded the case to the district court for
further proceedings on the equitable claims.
On remand, the defendants filed a motion for summary judgment
on the remaining equitable claims. The district court granted the motion.
Plaintiff again appealed.
The court of appeals affirmed the district court grant of summary
judgment on the equitable claims of unjust enrichment and quantum
meruit. The court of appeals reversed the district court grant of summary
judgment on the promissory estoppel claim.
We granted further review.
II. Standard of Review.
The standard of review for district court rulings on summary
judgment is for correction of errors of law. Mason v. Vision Iowa Bd., 700
N.W.2d 349, 353 (Iowa 2005). Evidence is viewed in the light most
favorable to the party opposing summary judgment. Murtha v. Cahalan,
745 N.W.2d 711, 713–14 (Iowa 2008).
III. Discussion.
A. Introduction. This appeal presents questions regarding the
relationship between the equitable doctrines of unjust enrichment,
quantum meruit, and promissory estoppel when there is a contract
between the parties governing the same subject matter.
There are two distinct questions. The first question is whether the
plaintiff may bring a claim for the cost of improvements to the property
based on implied contract in the face of an express contract which
allocated the cost of improvements. The second question is whether the
plaintiff may seek to bring a claim of promissory estoppel under the facts
and circumstances of this case.
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B. Quantum Meruit and Unjust Enrichment to Recover
Uncompensated Costs of Improvements. The first question we address
is whether Kunde may bring claims for unjust enrichment or quantum
meruit related to improvements made to the farmland when the parties
entered into a contractual relationship specifically allocating the costs of
improvements on the property. The district court concluded that in light
of the existence of a contract covering the same subject matter, Kunde
could not bring these equitable claims.
On appeal, Kunde concedes that an express contract and an implied
contract cannot coexist with respect to the same subject matter. Chariton
Feed & Grain, Inc. v. Harder, 369 N.W.2d 777, 791 (Iowa 1985). Kunde
maintains, however, that there may be an implied contract on a point not
covered by an express agreement so long as it is a point not “fully covered
by an express contract and in direct conflict therewith.” Smith v. Stowell,
256 Iowa 165, 174, 125 N.W.2d 795, 800 (1964). Kunde takes issue with
the district court’s conclusion that the subject matter was “Bowman’s farm
and the relationship, rights, and obligations that Kunde had with it.”
According to Kunde, because the farm leases do not obligate Kunde to
make the improvements listed in the addendum, there is no express
contract provision governing such improvements.
Bowman 1 agrees with the general principles outlined by Kunde, but
disagrees with Kunde regarding their application in this case. Bowman
focuses on the express terms of the written contracts between the parties.
Bowman points out that the express agreements specifically allocated
100% of the input costs and expenses to Kunde. Further, Bowman notes
that the leases specifically stated that any new improvements “erected or
1Estate of Arthur D. Bowman and Diane Engelkins will be collectively referred to
as Bowman.
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established upon the Real Estate during the term of the Lease” would be
considered “additional rent and shall inure to the Real Estate, becoming
the property” of Bowman. Further, Bowman observes, the lease provided
that no expense could be incurred by or on account of Bowman without
his written authorization. Because of these specific lease provisions,
Bowman argues that the express terms of the farm leases prevent Kunde
from recovering under the implied contract theories of quantum meruit
and unjust enrichment.
We agree with Bowman. Kunde’s unjust enrichment and quantum
meruit claims focus on a right to recover the cost of improvements. The
doctrines of unjust enrichment and quantum meruit are based upon the
concept of implied contract. Chariton Feed & Grain, 369 N.W.2d at 791.
We have held that “[a]n express contract and an implied contract cannot
coexist with respect to the same subject matter.” Legg v. W. Bank, 873
N.W.2d 763, 771 (Iowa 2016) (quoting Chariton Feed & Grain, 369 N.W.2d
at 791). While it has been held that implied contract theories may coexist
with written contracts, the cases involve situations where recovery was
sought for matters not covered or agreed upon in the contract, see Nepstad
Custom Homes Co. v. Krull, 527 N.W.2d 402, 407 (Iowa Ct. App. 1994)
(stating that a builder may recover for extras not covered by contract), or
where a contract does not address a particular term that the facts and
circumstances suggest should be supplied by implication, see Carlson v.
Maughmer, 168 N.W.2d 802, 803 (Iowa 1969) (stating that, in employment
contracts, reasonable compensation is implied when contract is silent on
amount of compensation).
Here, the parties entered into an express written agreement related
to the farmland improvements and allocated the costs of any
improvements. The existence of an express contract on these matters
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prevents Kunde from circumventing their agreement by seeking to use
theories of unjust enrichment and quantum meruit to recover for
improvements to which he was plainly not entitled under the terms of the
contract. Legg, 873 N.W.2d at 771; Chariton Feed & Grain, 369 N.W.2d at
791. As a result, the district court did not err in granting summary
judgment to Bowman on these claims.
C. Promissory Estoppel to Enforce Promise of Option to
Purchase Land. We now consider whether the district court properly
granted Bowman’s motion for summary judgment on the promissory
estoppel claim based on the alleged promise of Bowman to Kunde that he
could purchase the land at his option. In order to consider whether Kunde
could enforce the option promise on a promissory estoppel theory, we must
first consider whether the claim may be brought in light of the existence
of the farm leases or whether, like Kunde’s claim for recovery based on
unjust enrichment and quantum meruit, they are not available. If Kunde
is allowed to press his option claim based on promissory estoppel, we must
consider whether the district court correctly identified the elements of
promissory estoppel as including a requirement of a “clear and definite
oral agreement.”
1. Relationship of promissory estoppel to agricultural leases. We first
consider whether the existence of the farm leases prevents an assertion of
promissory estoppel related to Kunde’s asserted option to purchase the
land. Bowman claims that the presence of the farm leases prevents the
assertion of promissory estoppel just as it does the claims of unjust
enrichment and quantum meruit. Kunde responds, however, that an
option to purchase is often separate and distinct from a farm lease, that
the farm lease does not contain an integration clause, and that the
summary judgment record provided a triable claim on whether Kunde
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reasonably relied upon the promise of an option by Bowman to make
improvements on the farm at his own expense that were not recoverable
from Bowman under the express terms of the lease agreement.
We agree with Kunde. The promissory estoppel claim is not based
solely upon an implied contractual theory that the cost of the
improvements should be borne by Bowman. Instead, the promissory
estoppel theory in this case rests upon the notion that Kunde made the
improvements on the land that were unrecoverable under the farm lease
in reliance upon a promise of an option to purchase the land. See
Restatement (Second) of Contracts § 90 cmt. a, at 242 (Am. Law Inst. 1981)
[hereinafter Restatement (Second)] (emphasizing role of reliance in
promissory estoppel). While Kunde’s attempt to shift the costs of
improvements to Bowman under his unjust enrichment and quantum
meruit theories flies directly in the face of explicit contractual terms
allocating the cost of improvements, the notion that Bowman promised
Kunde an option to purchase the farmland that he improved is not
necessarily inconsistent with the terms of the lease. See Levien Leasing
Co. v. Dickey Co., 380 N.W.2d 748, 752 (Iowa Ct. App. 1985) (finding that
option to purchase is not necessarily inconsistent with written lease even
though the written lease contained an integration clause when the
evidence showed a practice of separating a lease from an option to
purchase); see also Walker v. Horine, 695 S.W.2d 572, 577 (Tex. App.
1985) (per curiam) (holding that lease and option are separate agreements
even though executed on same day because each agreement gives the
parties separate benefits as well as separate obligations); Bess v. Jensen,
782 P.2d 542, 544–45 (Utah Ct. App. 1989) (holding that lease and option
are separate agreements because executed in different documents and
supported by different consideration); Ledaura, LLC v. Gould, 237 P.3d
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914, 921–22 (Wash. Ct. App. 2010) (holding that lease and option are
separate agreements even though executed on consecutive days by the
same parties concerning the same property). Further, we note that in this
case, the farm leases did not contain an integration clause suggesting that
the leases were designed to represent the sole expression of the parties’
relationship.
In finding for Kunde on the promissory estoppel issue, we are not
rewriting the contract. We are not shifting the cost of improvements in
light of express contractual agreements to the contrary. Instead, we are
simply holding that Kunde has raised a triable issue on the question of
whether he made his improvements at his own expense in reliance upon
the alleged promise of an option to purchase the land.
2. Agreement vs. promise in promissory estoppel. Kunde argues that
promissory estoppel does not require proof of a “clear and definite
agreement.” Instead, Kunde argues that promissory estoppel may be
established where a promisee reasonably relies upon a promise that does
not necessarily contain all the elements of an enforceable contract.
In support of his argument, Kunde cites Restatement (Second) of
Contracts, section 90, which provides,
A promise which the promisor should reasonably expect to
induce action or forbearance on the part of the promisee or a
third person and which does induce such action or
forbearance is binding if injustice can be avoided only by
enforcement of the promise. The remedy granted for breach
may be limited as justice requires.
Restatement (Second) § 90(1), at 242. According to Kunde, the language
of section 90 emphasizes the presence of a “promise,” not an “agreement.”
Kunde recognizes that our Iowa caselaw sometimes suggests that
the elements of promissory estoppel include a “clear and definite oral
agreement.” See, e.g., McKee v. Isle of Capri Casinos, Inc., 864 N.W.2d 518,
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532 (Iowa 2015). Kunde argues, however, that other Iowa cases more
accurately state the elements of promissory estoppel as requiring a
“promise” rather than an “agreement.”
On the other hand, Bowman suggests that an “agreement” is
required under our caselaw. Because the district court and the court of
appeals had previously found that no enforceable contract existed with
respect to the alleged option to purchase, Bowman reasons that
promissory estoppel is not available to Kunde.
We begin our analysis with a brief survey of the Iowa caselaw. Our
Iowa caselaw regarding promissory estoppel has evolved over time. In the
early case of Port Huron Machinery Co. v. Wohlers, 207 Iowa 826, 221 N.W.
843 (1928), we embraced the concept of promissory estoppel advocated by
Professor Williston in the context of a unilateral contract in which the
acceptance arose not from verbal acts but from acts indicating acceptance.
Id. at 829–30, 221 N.W. at 844–45. We had no occasion in Port Huron,
however, to consider the contours or limits of the doctrine. See id.
The modern Iowa caselaw trail on promissory estoppel continued
with Miller v. Lawlor, 245 Iowa 1144, 66 N.W.2d 267 (1954). In Miller, the
plaintiffs alleged they built a house in reliance on a promise by a
neighboring property owner that he would not build in a fashion to
obstruct the plaintiffs’ “terrific” nine-mile view from their home. Id. at
1146, 66 N.W.2d at 269. The question in Miller was whether the plaintiffs
could enforce the assurance obtained from the neighbor. See id. at 1149–
50, 66 N.W.2d at 271.
In considering the matter, we declared that promissory estoppel “is
now a recognized species of consideration.” Id. at 1152, 66 N.W.2d at 272
(quoting Porter v. Comm’r, 60 F.2d 673, 675 (2d Cir. 1932)). We cited in
its entirety the Restatement (First) of Contracts section 90 for the
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proposition that a promise is binding if the promisor should reasonably
expect it to induce action or forbearance on the part of the promisee. Id.
at 1153, 66 N.W.2d at 273. We emphasized that such a promise is binding
even without consideration. Id.
In Miller, the defendant asserted that an element of promissory
estoppel was a “clear and definite oral agreement.” Id. at 1154, 66 N.W.2d
at 273. Without expressly adopting this element, we concluded that the
plaintiff offered evidence of “a clear and definite oral agreement” and was
entitled to relief. Id. at 1153–56, 66 N.W.2d at 273–75.
We reviewed the elements of promissory estoppel in Schoff v.
Combined Insurance Co. of America, 604 N.W.2d 43, 49 (Iowa 1999). From
Miller and later cases, the Schoff court at first identified three elements of
promissory estoppel as follows: “(1) a clear and definite oral agreement;
(2) proof that plaintiff acted to his detriment in reliance thereon; and (3) a
finding that the equities entitle the plaintiff to . . . relief.” Id. at 48 (quoting
Johnson v. Pattison, 185 N.W.2d 790, 795 (Iowa 1971)). But later, instead
of those three elements, the Schoff court identified four elements:
(1) a clear and definite promise; (2) the promise was made with
the promisor’s clear understanding that the promisee was
seeking an assurance upon which the promisee could rely and
without which he would not act; (3) the promisee acted to his
substantial detriment in reasonable reliance on the promise;
and (4) injustice can be avoided only by enforcement of the
promise.
Id. at 49. The difference between the earlier and later formulations of the
elements of promissory estoppel in Schoff was two-fold. First, the later
Schoff formulation changed the phrase “clear and definite agreement” in
the first element of promissory estoppel to “clear and definite promise.”
See id. at 48–49. Second, the later Schoff approach broke down the
reliance into two separate elements. See id.
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These two changes in the later Schoff formulation were related. The
emphasis in the later Schoff formulation shifted away from a narrow view
of promissory estoppel as merely a substitute for consideration and toward
a doctrine that emphasized reliance. See id. Both the change in the first
element from “agreement” to “promise” and the breaking down of reliance
into two separate elements—one focusing on the promisor and the other
focusing on the promisee—reinforced promissory estoppel as a doctrine
focused on protection of reliance-type interests.
The Schoff court’s emphasis on a promise and reliance, rather than
agreement and consideration, was repeated in Kolkman v. Roth, 656
N.W.2d 148, 156 (Iowa 2003). In Kolkman, we cited the later four-element
test for promissory estoppel stated in Schoff requiring the presence of a
“clear and definite promise” rather than a “clear and definite agreement.”
Id. We noted that “promissory estoppel is not only a substitute for
consideration, but is also recognized as an exception to the statute of
frauds even in cases where the promise may be supported by
consideration.” Id. at 153. We declared in Kolkman that the “strict proof”
requirement in promissory estoppel cases is designed to ensure the
presence of “a promise that justifies reliance by the promisee” and that
“reliance inflicted injustice that requires enforcement of the promise.” Id.
at 156 (emphasis added). The method of analysis employed in Schoff and
Kolkman thus moved away from using promissory estoppel as a doctrine
to provide consideration in an otherwise enforceable agreement and
toward protection of reliance interests that arise from clear and definite
promises.
Yet, in McKee, we cited the early formulation in Schoff for the
proposition that promissory estoppel required a party to prove “a clear and
definite oral agreement.” 864 N.W.2d at 532 (citing Schoff, 604 N.W.2d at
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48). In McKee, however, we rejected a promissory estoppel claim because
the plaintiff had failed to show detrimental reliance. Id.
The issue in this case is whether promissory estoppel requires the
presence of a “clear and definite agreement” or whether it is sufficient for
a party to present evidence of a “clear and definite promise” of the type
that the promisor would understand would cause the promisee to rely
upon. We think it clear that a “clear and definite promise” is sufficient if
the other elements of promissory estoppel are met.
First, we look to the language of Restatement (Second) of Contracts,
section 90. We regard the use of the term “promise” rather than
“agreement” in the Restatement (Second) as a deliberate choice. Our
approach is supported by illustration 12 under section 90, which is
strikingly similar to this case. Under illustration 12,
A promises to make a gift of a tract of land to B, his son-in-
law. B takes possession and lives on the land for 17 years,
making valuable improvements. A then dispossess B, and
specific performance is denied because the proof of the terms
of the promise is not sufficiently clear and definite. B is
entitled to a lien on the land for the value of the improvements,
not exceeding their cost.
Restatement (Second) § 90 cmt. d., illus. 12, at 246; see Kaufman v. Miller,
214 Ill. App. 213, 214, 217–18 (Ill. App. Ct. 1919).
Second, our approach is also consistent with our more recent
caselaw such as Schoff and Kolkman. As noted above, these cases
emphasize the reliance element in promissory estoppel over the narrower
function of merely filling the void of lack of consideration in otherwise
enforceable agreements.
We do not think our citation in McKee undermines the thrust of our
better reasoned cases. McKee accurately cited language in Schoff which
stated that a “clear and definite agreement” was an element of promissory
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estoppel. But after citing our prior approach to promissory estoppel, the
Schoff case emphasizes reliance and promise, not agreement. 604 N.W.2d
at 48–49. After its initial citation of the elements of promissory estoppel
from our prior cases, Schoff later declares that the first element of estoppel
is one of “clear and definite promise.” Id. at 49. When read in its entirety
and in context, Schoff stands for a broader approach to promissory
estoppel than the approach in Miller. In any event, in McKee, the
promissory estoppel claim was rejected based on a failure to demonstrate
reliance as a matter of fact. 864 N.W.2d at 532. The citation to prior law
in McKee regarding the element of a “clear and definite agreement” was not
essential to the holding of the case and has not impacted the march of our
cases away from the requirement of an agreement and toward emphasis
on reliance and promise.
Finally, our approach has support in cases from other jurisdictions
which, though not binding, lend persuasive support to our approach. For
example, in Hoffman v. Red Owl Stores, Inc., the Wisconsin Supreme Court
noted that while promissory estoppel originally was thought to apply only
as a substitute for consideration in an otherwise enforceable contract,
promissory estoppel under Restatement (First) section 90 is often
appropriate when the parties have not mutually agreed on all the essential
terms of a proposed transaction. 133 N.W.2d 267, 275 (Wis. 1965).
Similarly, in Vigoda v. Denver Urban Renewal Authority, 646 P.2d
900 (Colo. 1982) (en banc), the Colorado Supreme Court noted that the
purpose of promissory estoppel was to allow recovery for “those who rely
to their detriment upon promises which the promisor should have
reasonably expected to induce such reliance.” Id. at 905. The Colorado
Supreme Court emphasized that the purpose of the promissory estoppel
cause of action reflects “an attempt by the courts to keep remedies abreast
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of increased moral consciousness of honesty and fair representations in
all . . . dealings.” Id. (quoting Peoples Nat’l Bank of Little Rock v. Linebarger
Constr. Co., 240 S.W.2d 12, 16 (Ark. 1951)). The Colorado Supreme Court
concluded that in order to prevent such injustice, the Restatement section
90 “should be applied to prevent injustice where there has not been
mutual agreement by the parties on all essential terms of a contract” but
where “a promise was made which the promisor should reasonably have
expected would induce action or forbearance, and the promise in fact
induced such action or forbearance.” Id.; see, e.g., Kiely v. St. Germain,
670 P.2d 764, 767 (Colo. 1983) (en banc); Bender v. Design Store Corp.,
404 A.2d 194, 196–97 (D.C. 1979); Rosnick v. Dinsmore, 457 N.W.2d 793,
799–801 (Neb. 1990); Neiss v. Ehlers, 899 P.2d 700, 704–07 (Or. Ct. App.
1995); Farm Crop Energy, Inc. v. Old Nat’l Bank of Wash., 750 P.2d 231,
240–41 (Wash. 1988) (en banc).
We recognize there are cases to the contrary. See, e.g., Keil v. Glacier
Park, Inc., 614 P.2d 502, 506–07 (Mont. 1980); Lohse v. Atlantic Richfield
Co., 389 N.W.2d 352, 357 (N.D. 1986); Weitzman v. Steinberg, 638 S.W.2d
171, 176 (Tex. App. 1982). Nonetheless, we find the Hoffman–Vigoda line
of cases is most consistent with the reasoning of Restatement (Second)
section 90 and our evolving caselaw. We conclude that a “clear and
definite promise” is sufficient to give rise to a promissory estoppel claim.
In applying the “clear and definite promise” element to the case at
hand, we believe Kunde’s claim survives summary judgment. Kunde has
offered evidence that Bowman promised him an option to purchase the
land at a price of $3000 per acre, that Bowman had reason to believe that
Kunde would rely on the promise, and that Kunde, in fact, did rely on the
promise to his detriment. The district court thus erred in granting the
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defendants’ motion for summary judgment on the promissory estoppel
claim.
IV. Conclusion.
For the above reasons, the district court judgment granting
summary judgment on Kunde’s unjust enrichment and quantum meruit
claims is affirmed. The district court judgment granting summary
judgment on Kunde’s promissory claim is reversed. We therefore vacate
the decision of the court of appeals, affirm in part and reverse in part the
judgment of the district court, and remand to the district court for further
proceedings.
DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT
JUDGMENT AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED.