Hinkel v. Sataria Distribution & Packaging, Inc. - 920 N.E.2d 766 (Ind. Ct. App. 2010)

Rule:

The doctrine of promissory estoppel provides that a promise that the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and that does induce such action or forbearance is binding if injustice can be avoided only by the enforcement of the promise. Restatement (Second) of Contracts § 90(1). Promissory estoppel permits recovery where no contract in fact exists. The elements of promissory estoppel are: (1) a promise by the promissor; (2) made with the expectation that the promisee will rely thereon; (3) that 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. An employee may invoke the doctrine of promissory estoppel in certain instances. To do so, the employee must assert and demonstrate that the employer made a promise to the employee, that the employee relied on that promise to his detriment, and that the promise otherwise fits within the Restatement test for promissory estoppel.

Facts:

The appellant, Mark Hinkel, was hired to work for the appellee, Sataria Distribution and Packaging, Inc. ("Sataria"). Hinkel was allegedly promised a year's worth of salary and insurance coverage if he were ever terminated involuntarily, but his written employment contract did not provide for severance pay or post-employment benefits. Hinkel was soon terminated, and he did not receive the severance package he says he was promised. Hinkel sued for breach of contract and/or promissory estoppel. The trial court entered summary judgment in favor of Sataria. We hold that (1) Hinkel's written employment contract is a completely integrated agreement which precludes consideration of any prior or contemporaneous oral promises, (2) to the extent the severance agreements were made after the execution of the written contract, they were not supported by additional consideration, and (3) Hinkel is unable to sustain his claim of promissory estoppel.

Issue:

Was Hinkel able to sustain his claim of promissory estoppel?

Answer:

No

Conclusion:

The court held that the employment contract was a fully integrated agreement; therefore, the parol evidence rule precluded consideration of any prior or contemporaneous oral promises. In addition, if any alleged promises regarding severance were made after the written employment contract was executed, such promises were not supported by additional consideration and were thus unenforceable. Further, Hinkel’s claim of promissory estoppel failed. While Hinkel claimed that the severance promises induced him to leave his previous employer and give up the security associated therewith, he was provided with a period of employment at a substantial salary and was given six weeks of severance following his termination. As such, he failed to show an injury so severe that injustice could only be avoided by enforcement of the alleged oral promise.