Opinion
No. C6-97-1176.
Filed January 13, 1998.
Appeal from the District Court, Hennepin County, File No. P4961027.
Mark C. McCullough, Skaar McCullough, (for appellant Allan R. Poncin)
Michael J. Burke, (for respondent Linda Fugina)
Considered and decided by Klaphake, Presiding Judge, Huspeni, Judge, and Harten, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1996).
UNPUBLISHED OPINION
Appellant challenges the district court's (1) award of summary judgment to respondent and (2) denial of appellant's request for attorney fees. Because we find that a material fact question exists, but that the court did not err in denying attorney fees, we affirm in part, reverse in part, and remand.
FACTS
Appellant Allan Poncin and respondent Linda Fugina are the two children of decedent Margaret Poncin. Appellant became estranged from decedent in 1991 and did not speak to her again until June 1995, when they reconciled. Appellant and respondent became estranged sometime after October 1991 and had little or no contact with one another until decedent's death in 1996.
On June 14, 1990, decedent conveyed title to her home to appellant and respondent jointly, reserving life estate to herself. The parties agree that sometime in 1991, respondent told appellant that if decedent disinherited him, respondent would give him half of decedent's estate. This subject was not discussed again until after decedent's death in 1996. In November 1991, decedent executed a will that left her entire estate to respondent.
In June 1995, when appellant and decedent reconciled, decedent informed appellant that she wanted appellant to draft a new will for her giving himself half of her estate. When appellant recommended that decedent consult another attorney, decedent stated that she would not pay someone else to do it. Decedent never made another will. In March 1996, appellant and decedent again became estranged and had very little contact before her death.
Appellant is an attorney.
After decedent's death, respondent filed a petition for summary assignment or distribution of decedent's estate. Appellant filed objections to the assignment and to the probate of the November will. Appellant moved for summary judgment and imposition of a constructive trust on decedent's assets or, in the alternative, to allow a copy of the 1990 deed to decedent's home to be considered as an original. Respondent also sought summary judgment to admit the November will to probate, to hold that respondent is entitled to all of decedent's personal property, and to declare the 1990 deed to decedent's homestead void.
The court granted summary judgment to respondent by admitting the November will to probate and finding that respondent was not obligated to share decedent's estate because her 1991 statement was not an enforceable promise. The court denied respondent's motion to void the 1990 homestead deed and instead ordered that appellant and respondent jointly owned the homestead. Appellant's remaining requests were denied.
Respondent has not filed a notice of review and this decision is not challenged on appeal.
DECISION Summary Judgment
A motion for summary judgment shall be granted when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that either party is entitled to a judgment as a matter of law. On appeal, the reviewing court must view the evidence in the light most favorable to the party against whom the judgment was granted.
Fabio v. Bellomo , 504 N.W.2d 758, 761 (Minn. 1993) (citations omitted). Appellant argues that the court erred in awarding summary judgment to respondent on the issue of decedent's estate because respondent's 1991 statement created an enforceable promise and a constructive trust should be imposed.
"A constructive trust may be imposed when there is clear and convincing evidence that the trust is necessary to avoid unjust enrichment." Spiess v. Schumm , 448 N.W.2d 106, 108 (Minn.App. 1989). A court may impose a constructive trust when it would be "morally wrong" for the property holder to retain the property. Id.
Appellant concedes that there was no consideration given for respondent's statement. Consideration insures that a promise enforced as a contract is not "accidental, casual, or gratuitous" but has been made with "some deliberation, manifested by reciprocal bargaining or negotiation." Cederstrand v. Lutheran Brotherhood , 263 Minn. 520, 531, 117 N.W.2d 213, 220 (1962) (citation omitted). Promises that lack any consideration are "bare moral obligations, binding only on the conscience, a breach of which is not redressible in the courts." Rask v. Norman , 141 Minn. 198, 201-02, 169 N.W. 704, 706 (1918).
Because there was no consideration for respondent's statement, and therefore enforcement as a contract would be inappropriate, appellant relies on the doctrines of promissory and equitable estoppel to justify imposition of a constructive trust. Our analysis of the promissory estoppel factors compels a conclusion that a material fact question exists and that summary judgment was improvidently awarded in this case.
Promissory estoppel applies when:
a promise has been made, (2) which the promisor expected or should have reasonably expected to induce action of a definite and substantial character by the promissee, (3) which in fact induced such action, and (4) in circumstances requiring the enforcement of the promise to avoid injustice.
Rudd v. Great Plains Supply , 526 N.W.2d 369, 372 (Minn. 1995).
1. Promise
An expression of commitment is not a promise unless it is communicated under such circumstances that a person can expect performance or rely on its expression. 1 Joseph M. Perillo, Corbin on Contracts § 1.13, at 35 (Rev. ed. West 1993). For a promise to be enforceable, it must be definite and clear. Geraci v. Eckankar , 526 N.W.2d 391, 398 (Minn.App. 1995), review denied (Minn. Mar. 14, 1995).
In her deposition, respondent explained that when appellant asked: "[i]s mom going to take me out of the will?", she responded: "[i]f she did that, I'd give you half anyway."
Respondent's statement clearly expresses an intention to give appellant half of decedent's estate if he was omitted from the will. For the purposes of estoppel, this statement was a promise. See Faimon v. Winona State University , 540 N.W.2d 879, 882-83 (Minn.App. 1995) (holding that the statement: "If a tenure track position should be approved, it would not be before 1994-95," was sufficiently clear and definite to be a promise), review denied (Minn. Feb. 9, 1996).
2. Reasonably expected to induce action or forbearance
The district court also found that respondent could not have reasonably anticipated that her statement would induce appellant to deny decedent's request to draft a new will. Because this is an appeal from summary judgment, however, the question is whether it was possible that respondent could expect her promise to induce reliance, not whether it actually did. In her deposition, respondent admits that when she told appellant she would share the estate, she intended to share it. She also admits that before the morning of the funeral, she had not decided whether or not she was going to give appellant half of decedent's estate. Further, respondent's counsel conceded during oral arguments that it would have been reasonable for appellant to believe that respondent planned to give him half of decedent's estate at the time respondent made her promise.
Because respondent stated that she did not decide until the morning of the funeral not to honor her promise, a material fact question is raised as to whether respondent reasonably should have foreseen that appellant would be induced to rely on her promise.
3. Reliance on the promise
Appellant claims that he did not draft a new will for decedent because he was relying on respondent's promise to share decedent's estate, and he wanted to avoid a possible professional conflict. In granting summary judgment, the district court held that because appellant had not spoken to respondent for four years when he refused to draft another will for decedent, his reliance on her promise was not reasonable.
Assuming that there was no undue influence, appellant could legally have drafted decedent's will. See In re Estate of Schroeder , 441 N.W.2d 527, 532 (Minn.App. 1989) (holding that a will drafted by a husband-attorney was valid absent a showing of undue influence), review denied (Minn. Aug. 15, 1989).
Although the test in AFSCME requires only that the promise "in fact induced" reliance, the supreme court has stated that any time reliance is at issue, there must be proof that the reliance was reasonable. Nicollet Restoration v. St. Paul , 533 N.W.2d 845, 848 (Minn. 1995) ("[E]stablishing the reasonableness of the reliance is essential to any cause of action in which detrimental reliance is an element."). In doing so, however, the supreme court also noted that "the reasonableness of reliance is a fact question for the jury." Id.
Because respondent admitted that it would have been reasonable for appellant to believe her promise when it was made and that she did not change her mind until the morning of the funeral, we believe that it should be left to a jury to decide whether appellant's reliance was reasonable.
Injustice
Judicial determination of injustice for the purposes of promissory estoppel should consider "the reasonableness of a promisee's reliance and a weighing of public policies in favor of both enforcing bargains and preventing unjust enrichment." Faimon, 540 N.W.2d at 883. Whether an injustice will occur if the promise is not enforced should be addressed by the court after a determination of the reasonableness of appellant's reliance has been made.
In sum, we believe that respondent's concession that she intended to share the estate at the time she made the promise, and her further concession that she did not change her mind until the morning of decedent's funeral, establish the existence of material questions which are susceptible of resolution only by a trier of fact. We reverse the summary judgment and remand for trial on the merits.
In appellant's petition, he argues that a constructive trust should be imposed to prevent respondent from benefiting from "her untruthfulness and her inducement of [appellant] to rely upon her now unkept promises." The district court addressed this argument in terms of Restatement (Second) of Contracts § 90 (1981) which has been adopted by Minnesota courts as the test for promissory estoppel. Cohen v. Cowles Media Co. , 479 N.W.2d 387, 391 (Minn. 1992). However, Minnesota courts also recognize the doctrine of equitable estoppel which can be raised upon a showing: (1) that promises or inducements were made; (2) that the promisee reasonably relied upon the promises; and (3) that the promisee will be harmed if estoppel is not applied. Hydra-Mac, Inc. v. Onan Corp. , 450 N.W.2d 913, 919 (Minn. 1990). The district court did not address this legal theory. Because appellant's arguments could fit the test of equitable estoppel under Hydra-Mac , nothing in this opinion is intended to preclude appellant from raising the doctrine of equitable estoppel on remand.
5. Attorney Fees
Appellant argues that the district court abused its discretion when it denied attorney fees on the issue of ownership of decedent's home. Minn. Stat. § 549.21, subd. 2 (1996) applied to appellant's claim and required appellant to prove that respondent acted in bad faith; asserted a claim or defense that is frivolous and that is costly to the other party; asserted an unfounded position solely to delay the ordinary course of the proceedings or to harass; or committed a fraud upon the court.
Minn. Stat. § 549.21 was repealed by 1997 Minn. Laws ch. 213, art. 1, but still applies to causes of action arising before August 1, 1997. Appellant's cause of action arose before August 1, 1997.
Appellant argues that respondent's admitted knowledge of the 1990 deed, and her later contest in court, demonstrate that fees should have been awarded. We disagree. There is nothing in the record to indicate that respondent's belief in the invalidity of the deed was unfounded. Decedent devised any interest that she had in her homestead to respondent. In addition, a December 1991 letter from decedent's attorney to decedent indicated that the home would pass to respondent at decedent's death. Challenging the 1990 deed was not in bad faith or frivolous. Denial of attorney fees was not an abuse of discretion.