Daniel Lee Schumacher, Appellant, vs. Lee Krone Schumacher, et al., Respondents.

STATE OF MINNESOTA 
 IN COURT OF APPEALS 
 C7-00-2039

Daniel Lee Schumacher,
Appellant,

vs.

Lee Krone Schumacher, et al.,
Respondents.

Filed June 5, 2001
Affirmed in part, reversed in part, remanded 
Hanson, Judge

Lake County District Court
CX-99-245

Glen A. Norton, Ross & Norton, PLLP, 1057 Stoughton Avenue, Chaska, MN 55318 (for appellant)

Gerald J. Morris, Johnson & Morris, LLP, Wells Fargo Bank Building, Suite 103, Silver Bay, MN 55614 (for respondents)

Considered and decided by Willis, Presiding Judge, Halbrooks, Judge, Hanson, Judge.

S Y L L A B U S Promissory estoppel cannot be used to avoid the statute of frauds to enforce an oral agreement to provide "lifetime" employment or to make a will. A prima facie case of unjust enrichment is shown where a party makes permanent improvements on another's land, with the belief that the landowner will someday bequeath the land to him, and the landowner is aware of this belief, encourages the improvements and then retains their benefits. O P I N I O N

HANSON, Judge

Appellant managed a bar and restaurant owned by respondents, who were his parents. When respondents began the process to sell the business, he sued, contending that they had orally agreed to give him lifetime employment and to convey the business and related real estate to him upon the first parent's death. The district court granted summary judgment for respondents, dismissing the breach-of-contract claims under the statute of frauds; dismissing the claim for unjust enrichment as being inadequately pleaded; and dismissing the promissory estoppel claim without specific explanation. The district court also denied appellant's motion to amend his complaint to add a claim for fraud. We affirm in part, reverse in part, and remand.

FACTS

In 1994, appellant Daniel Schumacher, his wife and their two daughters, moved to Finland, Minnesota, to operate a restaurant and bar business called the Trestle Inn. The Inn was owned by his parents, respondents Lee and Juanita Schumacher. Appellant claims that respondents induced him to leave his previous job and to make the move by agreeing to provide him a job managing the Inn for life and to leave the business and a large parcel of land to him when the first respondent dies. Appellant asked for that agreement in writing, but respondents refused.

Appellant was given free rein to manage the Inn, hire and fire staff and pay all expenses. He was not paid a salary or wage, but was allowed to retain all profits of the business as his compensation. While operating the Inn, appellant used his own funds to build a home for his family on respondents' land, install a well, purchase equipment for the business and develop various marketing tools to expand the business.

In the fall of 1998, appellant suspected that respondents were planning to sell the Inn and the adjoining property. Appellant sued for a restraining order to prevent the sale of the Inn and the termination of his employment, or in the alternative, an award of damages for the value of the services he rendered to the Inn during the course of his employment. Appellant's complaint set forth the general facts without specifically identifying the legal theories for relief. He now suggests that he intended to assert claims for (1) breach of an agreement to provide lifetime employment; (2) breach of an agreement to make a will; (3) promissory estoppel; and (4) unjust enrichment.

On October 28, 1998, respondents notified appellant in writing that his employment at the Inn and his tenancy at will for the related property were terminated. Respondents then moved for summary judgment. The district court granted summary judgment, determining that the statute of frauds barred both breach-of-contract claims, the unjust-enrichment claim had "not been specifically pled" and all "other issues" raised in the complaint should likewise be dismissed. Appellant moved to amend the complaint to include claims of fraud, intentional infliction of emotional distress and unilateral contract. The district court denied appellant's motion to amend. This appeal followed.

ISSUES Did the district court err in granting summary judgment on appellant's claims for promissory estoppel and unjust enrichment? Did the district court abuse its discretion in denying appellant's motion to amend his complaint to include a claim of fraud? ANALYSIS

I.

On appeal from summary judgment, this court determines (1) whether there are any genuine issues of material fact and (2) whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990); see also Minn. R. Civ. P. 56.03.

At oral argument, appellant urged that his contract claims should survive summary judgment. However, he did not argue these claims in his brief. Thus, appellant has waived any challenge to the district court order insofar as it determined that the contract claims were barred by the statute of frauds. See Melina v. Chaplin, 327 N.W.2d 19, 20 (Minn. 1982) (stating that issues not briefed on appeal are waived).

Promissory Estoppel

Appellant contends that the district court did not address his claim for promissory estoppel. The court, in its sparsely worded order, did include the following conclusion:

To the extent that the parties raised other issues at the proceedings and in their pleadings, the Order granting summary judgment and denying leave to amend is and ought to be construed to deny any other relief sought by either party.

Thus, though no legal reasoning is given, it appears that the district court intended to dismiss all claims raised by appellant, including promissory estoppel.

Appellant alleges that respondents made two promises: (1) that respondents would employ appellant for life and (2) that respondents would convey the property to appellant when the first respondent dies. Whether these allegations support a claim for promissory estoppel requires a three-step analysis: (1) was a clear and definite promise made to the promisee; (2) did the promisor intend to induce reliance and did the promisee in fact rely on that promise to his or her detriment, and (3) must the promise be enforced to prevent injustice? Cohen v. Cowles Media Co., 479 N.W.2d 387, 391 (Minn. 1992); See also Martens v. Minn. Mining & Mfg. Co., 616 N.W.2d 732, 746 (Minn. 2000) (noting that Supreme Court has also described the first element of promissory estoppel as requiring the promisor to reasonably expect to induce action of forbearance, but that the variations in the descriptions of the elements of promissory estoppel "do not differ in meaning").

In this connection, we note an apparent inconsistency in Minnesota decisions on whether promissory estoppel can apply where there is an actual agreement, albeit an unenforceable one by