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To "rely," in the law of promissory estoppel, is not merely to do something in response to the inducement offered by the promise. There must be a cost to the promisee of doing it.
Plaintiff attorney agreed to loan defendant start-up capital and provide defendant legal services to start a new restaurant. In exchange, defendant promised to give plaintiff an ownership interest. Defendant accepted plaintiff's legal advice but got a loan elsewhere and did not make plaintiff a part owner. A jury awarded the plaintiff damages of $ 135,000 in a diversity suit governed by Wisconsin law. The damages were broken down as follows: $ 117,000 for promissory estoppel, $ 1,000 for misrepresentation, and $ 17,000 for unjust enrichment. In response to the defendants' motion under Fed. R. Civ. P. 59(e) to alter or amend the judgment, the judge rendered judgment for the defendants on the promissory estoppel claim on the ground that the plaintiff had failed to prove reliance; but he let the jury's verdict stand with respect to the other claims. Later he denied the plaintiff's motion for costs, on the ground that the plaintiff had failed to recover the minimum amount in controversy fixed in the diversity statute. 28 U.S.C. § 1332(b). Both sides appealed.
Did the district court err in overturning the jury’s verdict for primary estoppel?
The court reversed the district court's order granting defendant entrepreneur's motion for post-trial relief from a jury judgment awarding plaintiff attorney damages for promissory estoppel because plaintiff detrimentally relied on defendant's oral promise to give plaintiff an ownership interest in a new venture in exchange for legal advice. According to the court, when one person conferred a benefit on another in circumstances in which the benefactor reasonably believed that he will be paid, that is, when the benefit was not rendered gratuitously, as by an officious intermeddler, or donatively, as by an altruist or friend or relative, then he was entitled to demand the restitution of the market value of the benefit if the recipient refused to pay.