Pop’s Cones Inc. v. Resorts International

Pop’s Cones Inc. v. Resorts International Superior Court of New Jersey 1998 1) Facts a) In May or June of 1994, Plaintiff began discussions with defendant regarding the possibility of Plaintiff relocating its business to a location owned by Defendant. b) The parties specifically discussed a property that at the time was being leased by “The Player’s Club.” Following the initial discussions, Defendant allowed Plaintiff to operate a vending cart free of charge for the summer of 1994 to test how well the business might do in that location. c) Plaintiff obtained permission from its franchisor for relocation of its business and a representative of the franchisor later visited the Player’s Club location with representatives of Plaintiff Defendant. In August of 1994, Plaintiff drafted a proposal and delivered it to Defendant. In late September 1994, Plaintiff twice contacted Defendant to determine the status of their deal. Plaintiff requested that Defendant decide before October 1, 1994, because Plaintiff would have to give notice to its current landlord. d) During the second September call, Defendant advised Plaintiff that the deal would have little difficulty going through and Plaintiff should give notice to its current landlord. Relying on Defendant’s statements Plaintiff gave notice and in October moved its equipment into storage. e) Plaintiff also sent designs to its franchisor and retained an attorney in preparation for moving to the new location. f) In November, Defendant sent Plaintiff’s attorney a proposed form of lease. The following month Defendant sent a written offer but the letter included the language that it was not intended to be binding. P g) Plaintiff and Defendant met, but Defendant asked to postpone the finalization of the lease until after the first of the next year. Plaintiff made several attempts in January to contact Defendant regarding the status of the lease. h) Eventually Defendant informed Plaintiff that the lease offer was withdrawn. Due in part to the previous location having already been re-let, Plaintiff was unable to find a suitable location and reopen until July. 2) History a) Plaintiff sued for damages resulting from their reliance on Defendant’s promise. The trial court granted Defendant’s motion for summary judgment. In the present case, Plaintiff is appealing the granting of summary judgment. b) Plaintiff claims there was sufficient reliance upon the promise to induce promissory estoppel 3) Issues a) Does the case fall under promissory estoppel i) Yes the case falls under primary estoppel. The plaintiff took efforts based on the reliance of the promisor to not fulfill the lease and paid to put her stuff in storage with her money to her detriment. ii) Plaintiff only seeks money for the damages she incurred not enforcement of the contract which makes the decision easier to fit with precedents iii) The defendants also should have expected that they would have induced actions by telling the defendant o not renew their lease 4) Judgment: Reversed and Remanded Pop’s Cones, Inc. v. Resorts International is a precedent case on the issue of reliance. Pop’s Cones was a retailer of frozen yogurt who entered into negotiations with Resorts International to move his business to a location they owned. During negotiations Resorts International promised that they would work out the lease information and told Pop’s to not renew his lease. Resort’s during negotiations assured Pop’s they were 95% of the way to finishing the deal. When the deal fell through, Pop’s was left without a place to operate and incurred loses from packing up his materials and placing them in storage. Pop’s then sued Resorts International from loses he picked up from the packing up his storage and lose of profits from his current location but not future profits. The court found there to be sufficient reliance upon the promise to warrant the recovery of the lost expenses during the contract negotiation. The court remanded the trial back to the trial court for further proceedings. Pop’s based his actions of not renewing his lease or looking for other locations on the assurances made by Resorts International. The direct statements made by Resorts International, could reasonably infer that Pop’s would face substantial hardship if Resorts closed the deal on him. The decision is also supported by the leading decision of Hoffman v. Red Owl Stores, Inc. The holding of the case stated assurances made during negotiations that a contract will be forthcoming amount to a promise sufficient to invoke promissory estoppel, when the promisee has relied to is detriment by giving up another business location and by incurring out-of-pockets expenses in preparation for the new location.