Opinion
99 Civ. 8977 (CM).
November 27, 2000.
MEMORANDUM DECISION AND ORDER GRANTING DEFENDANT'S MOTION FOR JUDGMENT AS A MATTER OF LAW
This matter is before the Court for a decision on defendants' motion for judgment as a matter of law, made after a trial to an advisory jury. Rule 39(c) of the Federal Rules of Civil Procedure allows a court, with or without the consent of the parties, to submit an equitable issue to an advisory jury. Both parties consented to an advisory jury in this case. At trial, the advisory jury returned a verdict for the plaintiff and awarded $225,750. For the reasons stated below, I conclude that defendants are entitled to judgment as a matter of law. The advisory verdict is, therefore, disregarded, and the clerk is directed to enter judgment dismissing the complaint.
FINDINGS OF FACT
When an advisory jury tries a case, the Court is not bound by its findings of fact, but must make findings in accordance with Fed.R.Civ.P. 52(a). What follows are my findings of fact.
Plaintiff Walter Arasimowicz was an independent distributor of Thomas' English Muffins in Eastern Pennsylvania for over 30 years. He lost his routes when S.B. Thomas' ("Thomas") corporate parent, Defendants Bestfoods, Inc. and Bestfoods Baking Company, changed its business practices to require its distributors to purchase their routes from Bestfoods. Arasimowicz refused to "buy" his route from Bestfoods, on the ground that he had already "bought" the route from his predecessor distributor. The undisputed evidence showed that Arasimowicz had indeed paid Peter Coleman and Mike Todara $13,500 to acquire their right to distribute Thomas and Pepperidge Farm products.
Prior to Arasimowicz's purchase of whatever rights Todara and Coleman had, he was required to obtain approval from Thomas' to become a distributor. To obtain the necessary permission, he spoke to Steven Kalinger, a representative of Thomas (as the defendant was then known). According to Arasimowicz, Kalinger said to him: ". . . termination could be taking place on nonperformance, nonpayment of the bill. Basically that was it, nonperformance being one, and nonpayment, but that those conditions also existed in the Pepperidge Farm agreement. So both agreements were similar inasmuch as the termination grounds were equal." (Tr. Trans. at 38.) Kalinger confirmed at trial that he assured Arasimowicz that he could be terminated as a distributor "[i]f he failed to follow the company stale policy or not keeping the bread fresh on the market, and he would not — if he would not pay his bill, he would be terminated. . . . [and] possibly if he indulged in some kind of illegal behavior and made it look poor for the company." (Id.) Both men agree that Kalinger set forth three specific reasons why Arasimowicz could be terminated as a Thomas' distributor and promised that he would not be terminated for any other reason "in perpetuity." (Id. at 126.)
Subsequently, Arasimowicz received a letter from Kalinger confirming that he was an acceptable distributor to Thomas'. However, the letter contained a statement that varied from Kalinger's earlier oral assurances. The key language read as follows: "It is understood that we do not assign territory on a permanent basis, and our decision to continue to ship products for your distribution is contingent upon our satisfaction with this arrangement in the future. It must be completely understood that you do not have a franchise to deliver our products." (Tr. Exh. 219.) Despite receiving this letter, Arasimowicz consummated his purchase from Coleman and Todara and started distributing Thomas' products.
Shortly thereafter, Arasimowicz also became an independent distributor of Pepperidge Farm baked goods. Pepperidge Farm provided plaintiff with a written contract, which stipulated that he could be terminated only for cause. (Tr. Exh. 222, Tr. Trans. at 38.) Arasimowicz returned to Kalinger and asked that Thomas' put his prior assurances in writing. According to Arasimowicz:
". . . I was wondering what — I would like to have something in writing, and I was assured [by Kalinger] that nothing was needed. I was dealing with S.B. Thomas and our agreement, our oral agreement would prevail, that would be an agreement that we had prior to my buying the route would prevail, and that no written agreement was needed. It was just a matter of fact that they would abide by the agreement that he verbally told me. . . . The grounds for termination were as he originally stated, if I chose not to service the route or if I did not, you know, pay my bills in a timely fashion, or if I simply chose to leave. These are the ways we could be separated. Nonperformance was probably the major issue."
(Tr. Trans. at 43.) Kalinger confirmed that he told Arasimowicz that no writing was necessary because "the oral commitment that was given by S.B. Thomas was far stronger than anything that was put in writing, and [Arasimowicz] was dealing with a company whose integrity and morality was beyond reproach." (Tr. Trans. at 126.) Kalinger specifically testified that he did not intend to create an at-will situation where plaintiff was concerned. (Tr. Trans. at 124.)
Following this conversation, Arasimowicz continued to distribute Thomas' products, in addition to Pepperidge Farm products, for some 33 years. Over the years, he even sold some portions of his route to Tony Quinnan, James J. Harrington and Eugene Meyung, two of whom were originally plaintiffs in this action. (This Court previously ruled that Harrington and Meyung, who had no relationship whatever with Bestfoods or any predecessor corporation, were required to look to Arasimowicz for relief and dismissed their claims against defendants. See Arasimowicz v. Bestfoods, Inc., 81 F. Supp.2d 526, 532 (S.D.N.Y. 2000)). There was no evidence at the trial that Arasimowicz entertained or sought offers to buy his Thomas' business at any point in his 33 years as a distributor.
On or about July 7, 1999, Arasimowicz was told that Bestfoods had decided to change its distribution scheme in his area. Defendants, which historically had never sold distributorships, were now going to require its distributors to purchase their routes from the company. Arasimowicz protested, on the ground that he had already paid Coleman and Todara consideration to acquire his route. Because he refused to pay defendants for his route, Arasimowicz was terminated as a distributor by Bestfoods. The parties stipulated that he was not terminated for poor performance or for non-performance.
THE ADVISORY VERDICT
Arasimowicz brought this action, alleging that Kalinger's oral assurances promissorily estopped Bestfoods to deny that he was entitled to continue as a distributor so long as he paid his bills, abided by the stale policy and otherwise performed adequately. Defendants denied that they were estopped by Kalinger's statements, and argued that the literal terms of the 1967 Letter Agreement made clear that Arasimowicz did not have the rights he claimed.
The case was tried to an advisory jury on September 25-28, 2000. The jury was instructed on Pennsylvania's law of promissory estoppel. Because the parol evidence rule barred plaintiff from relying on prior oral representations to modify the terms of a written contract, the jury was specifically advised that, in order to support a claim of promissory estoppel, the plaintiff had to rely on oral representations that post-dated the receipt of the 1967 Letter Agreement. (Tr. Trans. at 297.)
After deliberating, the jury returned a special verdict sheet that contained the following findings of fact:
(1) Did Defendants make a clear and unambiguous promise to Plaintiff?
Answer: Yes.
(2) If yes:
(a) What was the nature of that promise?
Answer: The right to deliver S.B. Thomas products in the designated territory for as long as [the plaintiff] complied with the terms of the oral agreement.
(b) In what way, if any, did that promise operate to modify the written agreement between Plaintiff and Defendants?
Answer: It clarified the terms of termination and assured that S.B. Thomas would honor its oral commitments; and
(c) What rights on the part of Plaintiff against Defendants did the promise create?
Answer: It created a right for the plaintiff to continue delivering in the designated territory for as long as he adhered to the terms of the original oral agreement.
(3) Did Plaintiff reasonably rely on that promise?
Answer: Yes.
(4) If yes: Did the Plaintiff suffer an injury as a result of that reliance?
Answer: Yes.
(5) If yes, state the amount of damages:
Answer: 10 times the weekly gross amount of $22,575=$225,750.
(Jury Verdict Sheet.) Neither party argued that the jury had failed to respond to the questions propounded to it, and the jury was discharged. (Tr. Trans. at 334-35.)
In the opinion of the Court, the jury did not answer the questions propounded to it, in that it did not set forth with specificity what it was that defendants clearly and unambiguously promised to plaintiff. Consistent with Rule 52(a), the Court has made such a finding: namely, that Kalinger promised plaintiff that he would not be terminated as a Thomas' distributor unless he violated the stale policy, failed to pay his bills or broke the law. The critical questions — when he made that promise in relation to the Letter Agreement and whether Arasimowicz relied on it — are discussed in greater detail below.
Post-Trial Procedural Motions
Within ten days after the advisory verdict came down, Defendants moved for judgment as a matter of law Pursuant to Fed R. Civ. P. 50(b), on the ground that the parol evidence rule barred Arasimowicz from relying on Kalinger's oral assurances to work a modification of the contract. Defendants note that Kalinger's original assurances predated plaintiff's purchase of his routes, and claim that Arasimowicz could not have relied on those assurances to his detriment, since he received the Letter Agreement, with its distinct lack of assurances, prior to consummating his purchase and taking up work. Plaintiff opposes that motion, claiming that Kalinger's post-purchase reaffirmation of his assurances, coupled with Arasimowicz's continuation in business in reliance thereon, suffice to meet the requirements for promissory estoppel under Pennsylvania law.CONCLUSIONS OF LAW
1. Parol Evidence Rule
The key to this case is the interrelationship between the parol evidence rule and Pennsylvania's doctrine of promissory estoppel.
The parol evidence rule provides that where the alleged "prior or contemporaneous oral representations or agreements concern a subject which is specifically dealt with in the written contract, and the written contract covers or purports to cover the entire agreement of the parties . . . the law is now clearly and well settled that in the absence of fraud, accident or mistake the alleged oral representations or agreements are merged in or superseded by the subsequent written contract, and parol evidence to vary, modify or supersede the written contract is inadmissible in evidence." Nicolella v. Palmer, 432 Pa. 502, 507, 248 A.2d 20, 22-23 (1968) (citations omitted). This venerable doctrine prevents a party from varying or modifying the terms of a written agreement by referring to contradictory representations made before the written contract was entered into. The purpose of the parol evidence rule is "to preserve the integrity of written agreements by refusing to permit the contracting parties to attempt to alter the import of their contract through the use of contemporaneous [or prior] oral declarations." LeDonne v. Kessler, 256 Pa. Super. 280, 286, 389 A.2d 1123, 1126 (1978) (quoting Rose v. Food Fair Stores, Inc., 437 Pa. 117, 120-121, 262 A.2d 851, 853 (1970)).
This court previously concluded that the 1967 letter reflected the contractual arrangement between Arasimowicz and Thomas. See Arasimowicz v. Bestfoods, Inc., 81 F. Supp.2d at 530. The letter, on its face, created an at-will contract, one where Arasimowicz' tenure was wholly contingent on Thomas' satisfaction with the arrangement. The existence of this written agreement barred the jury from finding that Arasimowicz relied on Kalinger's initial oral declarations when he purchased the route, or that reliance on those pre-sale assurances worked any modification of the written contract. See Nicolella, 432 Pa. at 507. The oral declaration and written contract are clearly in conflict; the parties' right to terminate is specifically dealt with in the writing; and there is no allegation of fraud, accident or mistake. See id. The pre-contractual representations, therefore, were merged in the contract, and could not be the basis for the jury's verdict (and the jury was so instructed). By the same token, they could not support a finding by this court, sitting in equity, of promissory estoppel.
2. Promissory Estoppel
It is equally clear, however, that the parol evidence rule does not bar evidence of a subsequent modification of a written contract. See id. at 508, 248 A.2d 20, 23 (1968); Hamilton Bank v. Rulnick, 327 Pa. Super. 133, 136, 475 A.2d 134, 136 (1984). However, in order to work a subsequent modification of a prior integrated agreement, the new representation must be clear and unambiguous. An oral contract that changes the terms of a written contract must be of such specificity and directness as to leave no doubt of the intention of the parties to change what they had previously solemnized by a formal document. See Gloeckner v. Baldwin Township Sch. Dist., 405 Pa. 197, 200, 175 A.2d 73, 75 (1961) . The oral evidence must be "of such a persuasive character that it moves like an ink eradicator across the written paper, leaving it blank so that the parties in effect start afresh in their . . . mutual commitments." Id.
Moreover, an oral representation must be supported by new and additional consideration in order to work a modification in an existing written agreement. See Nicolella, 432 Pa. at 508. It is here that the doctrine of promissory estoppel becomes relevant. "It is hornbook law that a contract, either oral or written, may be modified by a subsequent agreement which is supported by legally sufficient consideration or a substitute therefor and meets the indicia of contract formation. Additionally, under the estoppel concept, a contract may be modified if either words or actions of one party to the contract induce another party to act in derogation of that contract, and the other justifiably relies upon the words or deeds of the first party." Kreutzer v. Monterey Cty. Herald Co., 560 Pa. 600, 606-07, 747 A.2d 358, 362 (2000); Stelmack v. Glen Alden Coal Co., 339 Pa. 410, 416, 14 A.2d 127, 129 (1940). In particular, a distributor may assert a claim under the equitable doctrine of promissory estoppel to modify an at-will contract. See Kreutzer, 560 Pa. at 607.
Of course, the doctrine of promissory estoppel must be cautiously applied. See Stelmack v. Glen Alden Coal Co., 339 Pa. 410, 416, 14 A.2d 127, 129 (1940). A promissory estoppel may only be found when all of the following circumstances are present: "a promise which the promisor should reasonably expect to induce action or forbearance on the part of the promissee 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." Restatement of Contracts 2d § 90. (emphasis added) The Pennsylvania Supreme Court in Stelmack has explained that: "The doctrine of promissory estoppel . . . may be invoked only in those cases where all the elements of a true estoppel are present, for if it is loosely applied any promise, regardless of the complete absence of consideration, would be enforceable." 339 Pa. at 416 (emphasis added).
Arasimowicz, arguing for promissory estoppel, testified that "I had to build [the route] from nothing . . . And if I hadn't had assurances that what I built was indeed mine to benefit by, I would never have put the work, money and effort into building this route the way I did. I continued on for over three decades doing this based on these assurances. There was no way that I would subject anyone to the kind of work I had put in knowing that they could simply take it away from me for no cause whatsoever." (Tr. Trans. at 44.) He alleges that he justifiably relied on Kalinger's post-Letter Agreement reaffirmance of his earlier representations, and that he was induced by this reaffirmance to continue to service his route for all those years, rather than selling the route in order to escape the risk of termination without compensation. That is the theory on which the case was tried.
There are, therefore, two questions for the Court: whether Kalinger's post-sale assurances are sufficiently specific and direct to support an estoppel, and whether Arasimowicz has established that Kalinger's post-Letter Agreement assurances induced him either to act or to forbear from pursuing other opportunities in reliance thereon.
Despite the Court's invitation, defendants steadfastly refuse to brief this issue, clinging to their argument that plaintiff cannot rely on promissory estoppel to overcome the presumption that the Letter Agreement created an at-will situation. See, e.g., Donohue v. Custom Mgmt. Corp., 634 F. Supp. 1190 (W.D.Pa. 1986) (holding that a "so long as" inference for employment did not provide any specific guidelines for determining the duration of the alleged contract and is therefore too ambiguous to overcome the presumption that the employment relationship was terminable at will); Geib v. Alan Wood Steel Co., 419 F. Supp. 1205 (E.D.Pa. 1976) (explaining that the "so long as" language does not provide any specific guidelines for determining the contract duration, and that "until retirement" language is similarly insufficient to overcome the presumption that the contract is terminable at will); Geiger v. ATT Corp., 962 F. Supp. 637 (E.D.Pa. 1997) (noting that plaintiff was not able to rebut the presumption of at-will employment by showing that he had provided additional consideration by his reliance on defendant's assurances); Stumpp v. Stroudsburg Mun. Auth., 540 Pa. 391, 658 A.2d 333, 336 (1995) (holding that detrimental reliance on a promise by a government employer "is simply not relevant" in determining whether an employee had a property interest in his employment).
Plaintiff does not really grasp the nettle either. He argues that promissory estoppel is not an exception to the at-will employment doctrine, contends that Kalinger's oral assurances served to modify the existing written document, and insists that Arasimowicz's actual reliance is demonstrated by his continuing to work his route for many years rather than selling it before Bestfoods adopted its new distribution scheme in 1996.
a. Promissory Estoppel and the At-Will Employment Doctrine
As noted above, Defendants argue that equitable doctrines cannot overcome the presumption of an at-will contract under Pennsylvania law. They are incorrect.See, e.g., Kreutzer v. Monterey Cty Herald Co., 560 Pa. 600, 747 A.2d 358 (2000) (noting that at-will contracts can be modified by "conduct or words which would create an estoppel"). However, in light of the law's presumption of employment at will, see Veno v. Meredith, 357 Pa. Super. 85, 96, 515 A.2d 571, 577 (Pa.Super.Ct. 1986), modification of an "at will" contract to one that can never be severed without "just cause" requires a very clear statement of an intention to so modify.
The at-will employment doctrine provides that:
"[W]hen a contract provides that one party shall render services to another, or shall act as an agent, or shall have exclusive sales right within certain territory, but does not specify a definite time or prescribe conditions which shall determine the duration of the relation, the contract may be terminated by either party at will. . . . The burden is on the plaintiff in such cases to overcome the presumption by showing facts and circumstances establishing some tenure of employment. The intention of the parties governs."Cummings v. Kelling Nut Co., 368 Pa. 448, 451, 84 A.2d 323, 325 (1951).
Pennsylvania specifically allows rebuttal of the presumption that employment is at-will where an employee establishes: (1) sufficient additional consideration; (2) an agreement for a definite duration; (3) an agreement specifying that employee will be discharged only for just cause; or (4) an applicable public policy exception. See Robertson v. Atlantic Richfield Petroleum Prods. Co., 371 Pa. Super. 49, 537 A.3d 814, 819 (1987).
As noted above, plaintiff is relying on the doctrine of promissory estoppel to overcome the presumption of at-will employment, which means that he must show an agreement specifying that he would be discharged only for just cause. Kalinger's statements to plaintiff are, in the opinion of this court, sufficiently definite to take this case outside the ambit of the Donohue and Geib cases.
Geiger is not really on point. In that case, the court refused to consider plaintiff's claim as arising under a theory of promissory estoppel, in the belief that equitable estoppel could not be an exception to the employment at-will doctrine. However, in Kreutzer v. Monterey Cty Herald Co., 560 Pa. 600, 747 A.2d 358 (2000), which was handed down by the Pennsylvania Supreme Court earlier this year, Pennsylvania's highest court held to the contrary. Therefore, on the point for which defendants cite it, Geiger would appear not to be good law.
In Donohue, 634 F. Supp. at 1200 (W.D.Pa. 1986), Plaintiffs alleged that there was an implied agreement for continued employment for "so long as" they performed satisfactorily and the company continued to operate a certain line of stores. The court presumed this contract to be terminable at will — as the law in Pennsylvania prescribes — and held that the "so long as" inference provided no specific guidelines for determining the duration of a contract. See id.
Similarly, the plaintiff in Geib, 419 F. Supp. at 1207, was hired by the Board of Directors of Upper Merion Plymouth Railroad to be president of the railroad "so long as [he] operated the railroad successfully, profitably and efficiently. . ." Id. Geib asserted a breach of an oral employment contract when he was fired two years later. The court held that the burden is on the party asserting the contrary to overcome the presumption of an at-will contract by showing facts or circumstances establishing tenure. See id. at 1208. The court noted that the terms "successfully, profitably and efficiently" were insufficient for Plaintiff to prove that his contract had a temporal dimension. See id.
In this case, the assurances Kalinger gave to Arasimowicz were not as loosey-goosey as those allegedly relied on by Geib and Donohue. Kalinger told Arasimowicz that he would only be terminated as a distributor in three circumstances: if he failed to follow the company "stale policy"; if he would not pay his bill; or if he engaged in some kind of illegal activity. (Tr. Trans. at 124-25.) If he did none of those improper things, Kalinger promised him that he would not be fired. (Id. at 126.) Kalinger thus set up specific criteria for determining whether there was just cause to fire plaintiff. Assuming, arguendo, that Arasimowicz was justified in relying on these statements, they created a contract that provided that he could only be terminated for just cause — which is, of course, one of the four recognized exceptions to the presumption of at-will employment in Pennsylvania. See Robertson, 371 Pa. Super. at 49.
But, of course, this simply brings us full circle. Arasimowicz relies on Kalinger's post-contract assurances, which he claims defendants are estopped to deny. Yet those assurances can support a modification of the existing written contract under equitable doctrines only if Arasimowicz proves (1) that Kalinger made specific and direct promises after he had received the Letter Agreement; and (2) that he detrimentally changed his position in reliance on Kalinger's assurances. This he has not done.
b. Assurances Made Post-Contract
As discussed above, the parol evidence rule bars consideration of Kalinger's assurances made before the 1967 agreement. All that remains, therefore, is Kalinger's post-contract promise that "the oral commitment that was given by S.B. Thomas was far stronger than anything that was put in writing, and [Arasimowicz] was dealing with a company whose integrity and morality was beyond reproach." (Tr. Trans. at 126.)
To support a claim of promissory estoppel, plaintiff must show that he relied on a "clear and reasonably certain promise." Josephs v. Pizza Hut of America, Inc., 733 F. Supp. 222 (W.D.Pa. 1989). See also CK Petroleum Prods., Inc. v. Equibank, 839 F.2d 188, 192 (3d Cir. 1988) (holding that a bank's "implied" promise to administer accounts in a certain fashion were too indefinite to sustain a claim of promissory estoppel); Armstrong World Indus., Inc. v. Robert Levin Carpet Co., No. Civ. A. 98-CV-5884, 1999 WL 387329 at *8 (E.D.Pa. May 20, 1999) (explaining that to sustain a promissory estoppel claim on the basis of an implied promise that a distributorship would be in effect into the "forseeable future" would render the doctrine meaningless); Nabisco v. Ellison, No. Civ. A. 94-1722, 1994 WL 622136 at *7 (holding that plaintiff could not maintain claims upon an implied promise inferred from defendant's silence and conduct).
Kalinger's promise to Arasimowicz was clear and reasonably certain.See Pizza Hut, 733 F. Supp. at 222. While Kalinger did not delineate the parameters of the "oral commitment" referred to, the statement would mean nothing without both Arasimowicz' and Kalinger's understanding of the substance of the "oral commitment." The fact that Kalinger made similar statements before and after the contract was entered into does not diminish the scope and effect of his subsequent oral statements which restated and resurrected his previous assurances. Even if Kalinger did not repeat every last oral statement he had made prior to the written contract, his clear reference to the vitality of his previous assurances is consistent with the parties' oral agreement and their intent to abide by the promises of plaintiff's grounds for termination. See Mazer v. Kann, 343 Pa. 376, 22 A.2d 707, 708 (1941) (allowing parties to orally substitute terms and provisions of a previous oral contract for a later written agreement). The jury concluded that Kalinger promised Arasimowicz that he would be fired only for cause, and that Arasimowicz reasonably relied on that promise. I see no reason to question either finding.
c. Action or Forbearance of Definite and Substantial Character
Even though Kalinger's post-sale representations were sufficiently specific and direct, Arasimowicz' action or forbearance in reliance on those promises was not of a sufficiently definite and substantial character as to justify a finding of promissory estoppel under Pennsylvania law.
In order to succeed on a claim of promissory estoppel, the action or forbearance induced must be of a "definite and substantial character."Stelmack v. Glen Alden Coal Co., 339 Pa. 410, 416, 14 A.2d 127, 129 (1940). The classic illustration is found in the case of Ricketts v. Scothorn, 57 Neb. 51, 77 N.W. 365 (1898), where a grandfather handed his granddaughter a promissory note for $2,000, saying: "I have fixed out something that you have not got to work any more. None of my grandchildren work, and you don't have to." Id. The grandfather did not ask his granddaughter to give up her employment, but merely promised that she would not have to work unless she wanted to. She stopped working, relying on the promise of $2,000. The Ricketts court admitted that there was no consideration, but enforced the promise because it had misled the promissee in such a way that it would be unfair to her to do otherwise.See id. This is not to suggest that in all cases where a gratuitous promise is made, and one relies upon it, the promissee can recover. However, if a detriment of a "definite and substantial character" has been incurred by the promisee, then the court may enforce the promise.See Langer v. Superior Steel Corp., 105 Pa. Super. 579, 161 A. 571 (Pa.Super. 1932).
Plaintiff must show that a detrimental change in position is more than hypothetical, see Yerger v. Landis Mfg. Systems, Inc., No. Civ. A. 88-7694, 1989 WL 66443 (E.D.Pa. 1989) (dismissing plaintiff's promissory estoppel claim because he offered no evidence that he would have acted differently in the absence of defendant's promise), and that the promise actually induced the plaintiff to act or forbear other opportunities.See Kehm v. Central Pa. Teamsters Pension Fund, No. Civ. A. 85- 2241, 1986 WL 7644 (E.D.Pa. July 8, 1986) (dismissing promissory estoppel claim because plaintiff took action independent of any of defendant's promises).
In Engstrom v. John Nuveen Co., 668 F. Supp. 953 (E.D.Pa. 1987), a case remarkably similar to the one at bar (but not cited by either party), plaintiff was hired by John Nuveen and Company to sell and trade tax-exempt securities. He invested in the company, and participated in its Profit Sharing Trust. Investors Diversified Services ("IDS") acquired Nuveen in 1969, and orally assured Engstrom that he would be employed "until his voluntary retirement"; that he would receive generous payments to make up for lost investments in Nuveen stock; and that he would receive "excellent treatment, salary increases and bonuses." Id. at 957. Nevertheless, IDS fired Engstrom in 1985.
Engstrom sued on several grounds, including promissory estoppel, alleging that in reliance on defendant's promises, he refrained from seeking other employment opportunities at higher rates of compensation.See id. The court granted summary judgment on this point for the defendants, claiming that Engstrom failed to offer sufficient evidence whether remaining at Nuveen for 16 years after receiving the alleged promises and failing to look for other employment was forbearance of a definite and substantial character in reasonable and justifiable reliance on Nuveen's alleged promise. See id. at 962. The court continued that "even assuming that a jury would find that [defendant] made promises to Engstrom, Engstrom stated in his deposition that he never sought or received another job offer while employed at Nuveen." Id. (citation omitted). Engstrom's failure to seek other employment was "not forbearance of a definite and substantial character as a matter of law because there is not sufficient evidence from which a reasonable person could find that Engstrom failed to look for other work in detrimental reliance on the alleged promises." Id.
In the present case, Arasimowicz offered evidence that he sought a writing to confirm his rights, but was verbally assured that such a writing was unnecessary. He demonstrated — and the jury agreed — that he relied on those promises by maintaining and working his route for many years instead of selling it to escape the risk of the termination without compensation that the defendant now claims is its right to effect. Despite Arasimowicz' reliance on Kalinger's assurances, however, he did not act or forbear opportunities in a way that would support a finding of promissory estoppel under Pennsylvania law.
In order for Arasimowicz to prevail, he needed to prove at trial that he took an action or passed up an opportunity in reliance on Kalinger's promise that he would only be fired for cause. Anything short of such proof would allow for any promise by Kalinger — regardless of the complete absence of consideration — to be enforceable. See Stelmack v. Glen Alden Coal Co., 339 Pa. 410, 416, 14 A.2d 127, 129 (1940).
Arasimowicz' claim that he built up his route and stayed on the job for thirty-three years is not forbearance of a definite and substantial character that can support a claim of promissory estoppel under Pennsylvania law. He had already made a substantial investment in his distributorship (he "bought the route") before Kalinger reaffirmed Thomas' oral commitment. No evidence was presented at trial that he had either entertained or sought offers to sell his business, or that he actually would have done anything differently if Bestfoods' promises had not been made. See Engstrom, 668 F. Supp. at 962. What he said was no different than what the plaintiff in Engstrom said — he stayed the course rather than seek out opportunities for change. If Engstrom's behavior did not constitute forbearance of a definite and substantial character, neither did Arasimowicz, and his promissory estoppel claim fails.
For the foregoing reasons, defendants' motion for judgment as a matter of law is granted. The Clerk of the Court is directed to enter judgment in favor of defendants and to dismiss plaintiff's complaint.
This constitutes the decision and order of this Court.