Promissory Estoppel – Compensation for Half the Value of An Unfinished Home Promised Prior To Divorce
Docket No. A-5294-18T2
Decided January 13, 2021
Submitted by New Jersey Family Law Firm, Hark and Hark
In a recent unpublished decision the Appellate Division reviewed a trial court’s order giving $167,000 to defendant from plaintiff’s parents in compensation for ½ value of an unfinished home plaintiff’s parents promised the parties prior to their divorce.
In Fischer, plaintiff filed for divorce against defendant. Defendant filed an answer and claim against plaintiff’s parents as third parties, alleging they promised to deed real estate owned by them so plaintiff could construct a home for the parties to live. In turn, the defendant agreed to sell her home in reliance of the promise. The parties spent a significant amount of time and resources building the home. The home was not complete when plaintiff filed for divorce.
Defendant argued that in exchange for the promise of this new home from plaintiff’s parents, she sold her home and invested significant time and expense into the home. Defendant argued she was entitled the value of the home from plaintiff’s parents. The trial court found that this to be true, as it was in reliance of the promise of a new home, defendant sold her home to live in this new one. This triggered promissory estoppel, preventing plaintiff’s parents from reneging on the promise because of the divorce. The Court valued the unfinish home at the time of the divorce filing, divided it by half, and awarded $167,000 to defendant from plaintiff’s parents.
Both plaintiff’s parents and defendant appealed. Plaintiff’s parents argued the judge erred in finding promissory estoppel. However, because the trial court made credibility findings in favor of defendant and against plaintiff and his parents, the Appellate Division upheld the decision on promissory estoppel. Defendant argued that she should have been awarded the full amount of the home because plaintiff expressed no interest in ownership. The Appellate Division found the trial court appropriately made the calculation, as it would have resulted in a windfall for defendant.
This case is also important to understand that promises or agreements made to induce another to detrimentally change their position can be enforceable, even if the agreement was not complete – even in family court. Here the promise of the home induced defendant to sell her home – changing her position detrimentally in reliance of receiving this home. The home wasn’t complete and the parties divorced, but defendant was nonetheless given a portion of the value of the home from plaintiff’s parents in the divorce action.
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