Brown v. Branch

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.