Stewart v. Cendant Mobility Services Corp.

Citations: 267 Conn. 96; 837 A.2d 736; 20 I.E.R. Cas. (BNA) 1185; 2003 Conn. LEXIS 514Docket: SC 16913

Court: Supreme Court of Connecticut; December 23, 2003; Connecticut; State Supreme Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Elizabeth M. Stewart filed a lawsuit against her former employer, Cendant Mobility Services Corporation, claiming wrongful termination. A jury found in her favor on the claims of promissory estoppel and negligent misrepresentation, awarding her $850,000. Cendant appealed, arguing the evidence was insufficient to support the verdict. The appellate court concluded there was adequate evidence for the jury to reasonably support the promissory estoppel claim, making the $850,000 award justifiable without needing to address the negligent misrepresentation claim. The facts indicated that after Cendant terminated Stewart's husband, she consulted her supervisor, James Simon, regarding her job security, receiving assurances that her husband's potential employment with a competitor would not impact her position. Relying on those assurances, Stewart remained with Cendant and did not seek other employment. However, after discovering her husband was consulting for a competitor, Cendant restricted her duties and sought her agreement to a document outlining her obligations related to her husband's work. Stewart was allegedly terminated on June 11, 1999, after refusing to sign this document. The appellate court affirmed the trial court's judgment.

The plaintiff initiated a lawsuit against Cendant, alleging four counts: 

1. Count one claimed an oral employment contract was formed during a conversation with Simon, and Cendant breached this contract by discharging her.
2. Count two asserted that her discharge violated an implied covenant of good faith and fair dealing.
3. Count three, based on promissory estoppel, contended that she relied to her detriment on Simon’s assurance that her employment would not be negatively impacted by her husband’s potential employment with a competitor.
4. Count four alleged negligent misrepresentation, stating that Simon made false statements that she relied upon to her detriment.

At trial, the jury favored Cendant on the breach of contract and implied covenant claims, but ruled in favor of the plaintiff on promissory estoppel and negligent misrepresentation, awarding her $850,000. Cendant subsequently sought to overturn the verdict and for judgment notwithstanding the verdict, arguing insufficient evidence supported the plaintiff's claims. The trial court denied these motions, leading to Cendant's appeal. On appeal, Cendant reiterated its assertion regarding the lack of clarity in its promise and claimed the plaintiff did not demonstrate detrimental reliance. The court rejected these claims, affirming the trial court's judgment, particularly the jury’s award based on the promissory estoppel claim. It noted that since the plaintiff's damages stemmed from both promissory estoppel and negligent misrepresentation claims, the sufficiency of evidence for the latter was unnecessary to evaluate. The appellate court also highlighted the standard of review, emphasizing the need to consider evidence favorably to the prevailing party and the importance of the jury's assessment of witness credibility in reaching its verdict.

Cendant challenges the sufficiency of evidence for the plaintiff's promissory estoppel claim, arguing that Simon's representations were not clear enough to constitute a promise. The court disagrees, citing the plaintiff's testimony that Simon assured her he had no concerns about her husband's potential competition, expressed respect for their integrity, and indicated that her employment status was secure. The plaintiff further asserted that Simon communicated with Kelleher, who reinforced her value to the company and confirmed there were no issues related to her husband's career move. During cross-examination, the plaintiff acknowledged that their discussions involved hypothetical situations and did not constitute contract negotiations. The jury found no definite offer regarding the breach of contract claim but affirmed that Cendant made a clear promise for the promissory estoppel claim. The court emphasizes that under contract law, a promise typically requires consideration to be enforceable; however, promissory estoppel allows for enforcement of a promise that induces reliance, as long as it is clear and definite, to avoid injustice.

A promisor is not liable to a promisee for relying on a promise if the promisor had no reason to expect such reliance, as assessed by an objective standard. A clear and definite promise is necessary for the doctrine of promissory estoppel to apply, but it does not need to be equivalent to a contract offer. The distinction between promises and offers is crucial; a promise must reflect a present intent to commit rather than a mere future intention. Expressions of hope or desire lacking real commitment do not induce reliance. Whether a statement constitutes a promise is typically a factual determination based on the circumstances. In the referenced case, sufficient evidence supported the jury's finding that Simon’s assurances to the plaintiff constituted a clear promise that her employment with Cendant would not be negatively impacted by her husband's potential employment with a competitor. Simon's unambiguous response to the plaintiff's concerns led the jury to reasonably conclude that a promise was made. Cendant argued that, under promissory estoppel law, promises in the employer-employee context must include key employment contract terms and demonstrate an intention to assume conventional contractual liability.

Cendant asserts that any promise must include all elements of a contractual offer. However, the court clarifies that its ruling in D’Ulisse-Cupo is not that extensive. In D’Ulisse-Cupo, the plaintiff, Maria D’Ulisse-Cupo, sued the board of directors of Notre Dame High School after they declined to renew her teaching contract. She claimed that the board's representatives made representations implying she would receive a new contract, which she relied upon to her detriment. The court held that these representations did not constitute promissory estoppel as they were neither sufficiently promissory nor definite, lacking essential terms for an employment contract, such as duration, salary, and benefits. The court concluded that the board's statements expressed a future intent rather than a definite promise of employment.

While some language in D’Ulisse-Cupo might suggest that a promise for promissory estoppel must be as specific as a contractual offer, the court rejects Cendant’s interpretation. It emphasizes that the context of D’Ulisse-Cupo shows the representations were inadequate for establishing actionable promises, not that all employment-related promises must equate to contractual offers. The determination of whether statements are promissory is a factual question. The present case differs from D’Ulisse-Cupo; Simon's representations were limited, assuring the plaintiff that her employment would not be adversely affected by her husband’s job with a competitor, while she remained an at-will employee. Thus, the clarity and definiteness of Simon's statements are significantly narrower than those in D’Ulisse-Cupo, which questioned the promise of a new employment contract without essential terms.

Cendant argues that the jury's findings regarding the plaintiff's breach of contract and promissory estoppel claims are contradictory. Specifically, the jury found no offer existed for the breach of contract claim, while simultaneously determining there was a promise for the promissory estoppel claim. Cendant asserts this inconsistency invalidates the jury's promise finding. However, the court finds this assertion without merit, clarifying that a promise does not need to equate to a contractual offer to support a promissory estoppel claim. The jury could reasonably conclude that Simon's representations constituted a promise that the plaintiff relied upon, while also determining that these representations did not express the terms of an employment contract. 

Furthermore, Cendant challenges the sufficiency of evidence supporting the plaintiff's claim of detrimental reliance on Simon's assurances. The court rejects this challenge, noting that the plaintiff approached Simon for guidance regarding her job security in light of her husband's potential employment with a competitor. Simon assured her of no adverse consequences, leading her to remain at Cendant and not pursue other job opportunities. Although the plaintiff admitted she had not been investigating other options and recognized her at-will employment status, evidence indicated her high value in the industry. Testimony confirmed that skilled salespeople like her typically have no trouble finding employment, often with lucrative offers that include signing bonuses based on potential commissions.

Salespeople for relocation service companies do not receive pipeline commissions if they leave for a competitor before the company is compensated by the client. To attract salespeople from other firms, companies offer signing bonuses as incentives to forgo potential commissions. Many salespeople, like the plaintiff, do not have accrued but uncollected commissions and lack the marketability to negotiate signing bonuses. Evidence presented at trial indicated the plaintiff had a pipeline valued at $812,700, which she was never paid.

To establish a claim of promissory estoppel, a party must demonstrate reliance on a promise that resulted in a detrimental change in their position. Such reliance may manifest through actions or forbearance but must involve a significant cost to the promisee. The promisee must have the ability to act differently without the promise, and proof must show that they would have pursued an alternative action absent the promise.

In this case, the plaintiff asserted she relied on Simon’s assurances, foregoing other job opportunities that could have provided a signing bonus comparable to her pipeline value. Cendant argued that she lacked sufficient evidence to prove she could have secured another position or that she would have sought employment elsewhere had she known her job at Cendant was at risk due to her husband's potential employment with a competitor. The court found Simon’s testimony credible, indicating that skilled salespeople like the plaintiff could typically find employment in the industry. Although the plaintiff was unaware of available positions, the jury could reasonably conclude she would have successfully sought one. The plaintiff expressed she needed Simon’s assurances to decide whether to remain with Cendant or explore other job opportunities.

The plaintiff chose to remain at Cendant based on assurances from Simon that her job would not be jeopardized if her husband took a position with a competitor. While the plaintiff indicated uncertainty about her actions without Simon's assurances, the jury had the discretion to interpret any inconsistencies in her testimony favorably. The jury could reasonably conclude that the plaintiff would have sought alternative employment had Simon not made those representations. Cendant argued that the plaintiff suffered no harm by not pursuing other job opportunities. However, the court disagreed, noting that by staying, the plaintiff lost potential employment with another company and a signing bonus equivalent to the value of her pipeline. Consequently, the evidence supported the jury's finding that the plaintiff reasonably relied on Simon's promises to her financial detriment, leading to an affirmed judgment. The jury awarded $850,000 for two claims based on the same facts, and the defendant's appeal was transferred to this court. The plaintiff had five other claims, with Cendant winning summary judgment on two and a directed verdict on two more, which the plaintiff did not appeal. The jury ruled in favor of the plaintiff on the remaining claim regarding unpaid wages under General Statutes 31-72, which Cendant did not contest. The discussion on promissory estoppel clarified that the reliance on Simon's promise did not need to equate to a formal contract offer. The trial court's jury instructions distinguished between an "offer," a clear contractual proposal, and a "promise," a statement that Cendant should have expected the plaintiff to rely upon. Cendant's argument that Simon's statements were ambiguous and not definitive was deemed meritless.

The plaintiff's lack of belief in negotiating an actual employment contract with Simon does not undermine the clarity and definiteness of Simon's representations, which the plaintiff could reasonably rely upon. Simon's statements, although related to a hypothetical future event, indicated Cendant's commitment to not take adverse actions against the plaintiff, contingent upon her husband's reemployment in the relocation services sector. Such representations were clear enough to induce reliance. The plaintiff testified that her income in 1998 was approximately $630,000, countering Cendant's claim that her reliance was unreasonable because she was an at-will employee. While she acknowledged her at-will status, she clearly stated that she believed Cendant could not terminate her based on her husband's employment with a competitor. Therefore, evidence supports the conclusion that Cendant could only terminate her for reasons unrelated to her husband's job with a competing firm.