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Law School Case Brief

Ypsilanti Twp. v. Gen. Motors Corp. - 201 Mich. App. 128, 506 N.W.2d 556 (1993)

Rule:

The elements of promissory estoppel are: a promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires. Promissory estoppel requires an actual, clear, and definite promise. Further, reliance is reasonable only if it is induced by an actual promise. A determination that there was a promise will be overturned if it is clearly erroneous.

Facts:

Defendant General Motors Corporation, Willow Run Plant ("GM") operated two plants in plaintiff Charter Township of Ypsilanti, Michigan, for several years. Over the years, Ypsilanti granted GM 11 statutory tax abatements to encourage the creation and maintenance of jobs in the state; the last abatements were granted in 1984 and 1988. In 1991, GM announced that it planned to close one plant and move that plant's operations to Texas. Ypsilanti filed a lawsuit against GM in Michigan state court counts of breach of a contract created by the tax abatement statute; breach of a contract created by conduct; promissory estoppel; unjust enrichment, and misrepresentation. Plaintiff County of Washtenaw joined the lawsuit voluntarily. Plaintiff State of Michigan was added by the trial court as a party-plaintiff. After a trial, the trial court GM was bound by promissory estoppel to retain production of one model automobile at the plant at issue for as long as GM produced that model. The trial court enjoined GM from moving its operations to another facility. GM appealed.

Issue:

Was GM barred, by promissory estoppel, from moving its operations from a plant in Ypsilanti, Michigan, to Texas?

Answer:

No.

Conclusion:

The appellate court reversed the trial court's judgment. The court noted that an actual, clear, and definite promise was required to show promissory estoppel, and it then ruled that GM made no promises at all. The court explained, inter alia, that the trial court's finding that GM promised to keep certain model production at the plant in issue was clearly erroneous because: (1) the mere fact that a corporation solicited a tax abatement and persuaded a municipality with assurances of jobs could not be evidence of a promise, and; (2) almost all the statements the trial court cited as foundations for a promise were, instead, expressions of GM's hopes or expectations of continued employment at the plant. Moreover, the acts cited by the trial court to support a promise made by GM were acts one would naturally expect a company to do in order to introduce and promote an abatement proposal to a municipality. The acts did not amount to a promise and, as course-of-conduct evidence, showed only efforts to take advantage of a statutory opportunity.

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