Frost Crushed Stone Company, Inc. v. Odell Geer Construction Co. Inc. ( 2002 )

Frost Crushed Stone Company v. Odell Geer Construction

  IN THE

TENTH COURT OF APPEALS

No. 10-00-282-CV

     FROST CRUSHED STONE

     COMPANY, INC.,

                                                                         Appellant

     v.

     ODELL GEER CONSTRUCTION

     CO., INC.,

                                                                         Appellee

From the 82nd District Court

Falls County, Texas

Trial Court # 33,038

DISSENTING OPINION

      The majority has chosen to legislate from the bench and create a new cause of action not previously recognized by the Texas Supreme Court or this court; in other words, the majority has created a monster. The DNA allegedly used to create this monster originated in a reference from the Texas Supreme Court and was given breath by a few of our sister courts of appeals.

      I would kill it. I would kill it now. This newly created monster has had a slow start; but if allowed to live, it will grow until it kills many other causes of action. Causes of action like fraud and negligent misrepresentation will be weaker and become unnecessary. The majority chooses to let it live. The issue and the monster: promissory estoppel as a free standing cause of action.

      From the research I have conducted, it appears that only one Texas intermediate appellate court has recognized this same issue and still created a new cause of action. The remaining courts that have addressed the issue have done so with “loose language” and without thorough analysis. The majority of this Court fails to properly analyze the cases on which it relies.

      The confusion of whether promissory estoppel could be the sole basis of a cause of action started with the Texas Supreme Court’s opinion in Wheeler v. White. Wheeler v. White, 398 S.W.2d 93 (Tex. 1965). I hardly suspect that the Supreme Court knew they were creating such confusion at the time Wheeler was written. In Wheeler, the plaintiff (Wheeler) alleged that White breached a contract to secure a loan or furnish money to finance the construction of improvements on land owned by Wheeler. In the alternative, Wheeler alleged that if the contract was not sufficiently definite, White was estopped from asserting the insufficiency of the contract. White asserted special exceptions to the contract and estoppel allegations, and the trial court sustained them. Wheeler refused to amend his pleadings, and the trial court dismissed his petition. The court of appeals affirmed the trial court’s dismissal.

      The Supreme Court agreed that the contract was insufficient but noted that “where a promisee acts to his detriment in reasonable reliance upon an otherwise unenforceable promise, courts in other jurisdictions have recognized that the disappointed party may have a substantial and compelling claim for relief.” Id. at 96. The Court stressed that promissory estoppel did not create a contract where none existed but only prevented a party from insisting upon its strict legal rights when it would be unjust to allow the party to enforce them. Id. That is, if for some rule or failure of proof, a contract does not exist or is unenforceable, an equitable remedy may be available. The function of this equitable remedy is defensive in that it estops a promisor from denying the enforceability of a promise. Id. The Court accepted the proposition that where there is actually no contract, the promissory estoppel theory may be invoked, thus supplying a remedy which will enable the injured party to be compensated for his foreseeable, definite, and substantial reliance. Id. at 97.

      No other Texas Supreme Court opinion has taken any of the above language or facts to mean that promissory estoppel is a cause of action independent from a contract or other claim. In fact, no other intermediate Texas appellate court has construed Wheeler in that manner ; that is, until today. The majority relies on a string of cases from our sister courts as support for its decision. These cases do not support an independent cause of action.

      In Henderson, the El Paso court found a contract claim to be unenforceable. Henderson v. Texas Commerce Bank-Midland, N.A., 837 S.W.2d 778, 781 (Tex. App.—El Paso 1992, writ denied). On its way to finding that the appellant did not prove promissory estoppel either, it unfortunately stated, “Promissory estoppel is an available cause of action....” Id. It attributed this statement to Wheeler. Id. at 782. The Supreme Court in Wheeler did not say promissory estoppel was an available cause of action. The Court said it was an equitable remedy. In any event, the appellant in Henderson was not relying only on promissory estoppel and no other claim. Thus, this case does not help the majority.

      In Cherokee Communications, the Eastland court, relying on Henderson, attributed the same statement about promissory estoppel to Wheeler. Cherokee Communications, Inc. v. Skinny’s, Inc., 893 S.W.2d 313, 317 (Tex. App.—Eastland 1994, writ denied). Again, that is not what Wheeler said. Cherokee and Skinny’s each filed motions for summary judgment. The trial court granted the motion by Skinny’s which claimed the written agreements between the parties lacked mutuality. Cherokee was not relying solely on promissory estoppel as a cause of action.

      The next court to perpetuate this misconstruction of Wheeler was the Austin court. See Bailey v. City of Austin, 972 S.W.2d 180 (Tex. App.—Austin 1998, pet denied). The Austin court relied on the statement in Cherokee. Id. at 193. In Bailey, the court affirmed the summary judgment on the appellant’s breach of contract claim because no valid contract existed. It reversed the summary judgment on appellant’s promissory estoppel claim because the City did not conclusively disprove any element of promissory estoppel. Thus, promissory estoppel was still derived from the assertion of an unenforceable contract claim.

      Then in Boales, the 14th Court of Appeals did not rely on Bailey, Cherokee or Henderson. See Boales v. Brighton Builders, Inc., 29 S.W.3d 159 (Tex. App.—Houston [14th Dist.]2000, no pet.). Instead, it relied on a case from Corpus Christi for the proposition that “Although promissory estoppel is usually a defensive plea, it can be used by a plaintiff as an affirmative ground of relief.” Id. at 166 (citing Donaldson v. Lake Vista Community Improvement Ass’n, 718 S.W.2d 815, 818 (Tex. App.—Corpus Christi 1986, writ ref’d n.r.e.)). This statement can be traced back to the Fort Worth court which noted that prior to Wheeler, language about promissory estoppel might have caused one to believe that it has a purely defensive use. Southwest Water Services, Inc. v. Cope, 531 S.W.2d 873, 877 (Tex. App.—Fort Worth 1975, writ ref’d n.r.e.). However, because of Wheeler, the Fort Worth court decided that the law was now settled that there may be appropriate uses by a plaintiff as a ground of entitlement of relief. Id. This concept is what we termed a “counter-defensive” theory in Sonnichsen. Sonnichsen v. Baylor, 47 S.W.3d 122, 125 (Tex. App.—Waco 2001, no pet.). Nowhere in Boales, Southwest, or the cases in between, did the plaintiff plead only promissory estoppel.

      The most recent case relied on by the majority is another opinion from Corpus Christi. See Reyna v. First Nat. Bank in Edinburg, 55 S.W.3d 58 (Tex. App.—Corpus Christi 2001, no pet.). In Reyna, the court stated, “Reyna is asserting promissory estoppel. Promissory estoppel is a cause of action available to a promisee who has acted to his detriment in reasonable reliance on an otherwise unenforceable promise.” Id. at 70, n. 4. This statement was in a footnote that had no impact on the decision by the court.

      In each of the cases cited above, the plaintiffs sued on causes of action other than promissory estoppel. They then asked for the equitable relief of promissory estoppel if they failed to establish their other causes. The odd-duck in all of this mess is a case cited by the majority from the San Antonio court which stated that most bid construction cases do not involve a contract thus promissory estoppel is a viable cause of action in those cases. Traco, Inc. v. Arrow Glass Co., Inc., 814 S.W.2d 186, 189 (Tex. App.—San Antonio 1991, writ denied). First, the majority provides no analysis as to why this case deserves citation. The majority has not decided that there is no contract. It doesn’t even state that it will follow San Antonio’s reasoning. So I must ask: What’s the point of citing this case? Second, if the majority is going to follow Traco, then it needs to conduct a review of the cases cited by Traco that “supports” the San Antonio court’s position. Traco relies on other jurisdictions to apply promissory estoppel to bid construction cases. Seeing that the Traco court misstates the holdings from Wheeler and a case from Fort Worth, I would not take for granted its interpretations of other jurisdictions’ case-law are correct.

      In this dissent, I would like to take the time to detail and further discuss these and other Texas cases that have dealt with this issue. But, because a majority of this Court has already reached its decision and because of the time pressures to clear cases off the dockets, I am limited to this abbreviated analysis and discussion.

      In conclusion there is simply no need to create a new cause of action. Promissory estoppel has a place as an equitable remedy when some other cause of action fails and equity demands protection of one of the parties. But equity should only be the last resort when legal remedies fail for some reason. I believe, based on the research conducted, that this case presents a very unique opportunity to distinguish between the proper role of promissory estoppel as a limited remedy rather than as a free standing cause of action. In this instance, Greer dismissed all its claims for legal remedies and pursued only promissory estoppel. The relief the majority has delivered to Greer is exactly the same Greer would have recovered if it had proven a breach of contract. But Greer dismissed that claim. Why should it be allowed the same relief under an equitable remedy that it chose not to seek as a legal remedy? For the reasons expressed herein,

I respectfully dissent.

                                                                         TOM GRAY

                                                                         Justice

Dissenting opinion issued and filed December 11, 2002

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