Warning
Info
- - tl;dr
- - ICRA
- - Facts & Holding
- - DeepDive
0 0
United States District Court for the District of Massachusetts - 798 F.Supp. 2d 336, 798 F. Supp. 2d 336
Tags: Promissory Estoppel
tl;dr:
Reliance on a bank's promise to negotiate a loan, and not foreclose, is enforceable under promissory estoppel.Video Summary
Case Summary
In the 2011 case, Frank Dixon v. Wells Fargo Bank, a Massachusetts couple sued Wells Fargo for breaking a contract. They claimed the bank agreed to change their mortgage but then tried to foreclose on their home. The couple, the Dixons, struggled to pay their mortgage due to financial issues, so they asked Wells Fargo for a loan adjustment. The bank told them they'd consider it if the couple stopped making payments and sent financial records. The Dixons followed these instructions but Wells Fargo didn't change their loan and started foreclosure proceedings. The Dixons sued, asking for an injunction to stop the foreclosure, the bank to fulfill their oral agreement to modify the loan, and damages. They claimed the bank's promise to consider their loan adjustment was binding under promissory estoppel - a legal doctrine that stops breaking a promise when another party relies on it to their detriment. Wells Fargo argued there was no contract between them and the Dixons and that federal law preempted the claim. The court disagreed, saying the Dixons had a potential promissory estoppel claim and that their claim wasn't overridden by federal law.
This case highlights how an oral promise can be enforced or rejected in a contract and the implications of promissory estoppel, preemption, and contract elements like offer and acceptance in these situations.
DeepDiveHighlight a legal term to see the definition
The Dixons are suing Wells Fargo for breach of contract and promissory estoppel, but Wells Fargo seeks dismissal of the complaint, arguing that the allegations are insufficient to invoke the doctrine of promissory estoppel and that any state-law claim is preempted by the Home Owners’ Loan Act and its implementing regulations. The Court has granted Wells Fargo's motion to dismiss the Dixons' contract claim but is still considering the sufficiency of the allegations in the complaint with respect to the doctrine of promissory estoppel and HOLA preemption. The legal standard for promissory estoppel is being established, and the court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. The case discusses the application of promissory estoppel in Massachusetts, which allows enforcement of indefinite promises made during preliminary negotiations if the promisor's conduct was designed to take advantage of the promisee. The Court questions whether Wells Fargo's promise to consider the Dixons for a loan modification should be considered a preliminary agreement to agree or an "agreement to negotiate." The Dixons claim to have suffered a legal detriment as a direct result of their reliance on Wells Fargo's promise. Under the theory of promissory estoppel, a negotiating party cannot break a promise made during negotiations if the other party has relied on it. Massachusetts courts have adopted section 90 of the Restatement (Second) of Contracts, which states that a promise that induces action or forbearance and is reasonably expected to do so is binding if enforcement is necessary to avoid injustice. The Restatement has approved the use of promissory estoppel to protect reliance on indefinite promises.
LSD+ Case Briefs
Features
- DeepDive for detailed case analysis
- Over 50,000 existing case briefs
- Instant briefs for another 6,000,000 cases
- Highlight dictionary for legal term definitions
- Social learning with chat and high points
Over 50,000 Cases Briefed
LSD+ gives you access to over 50,000 case briefs, more than anyone else. Be the first to email us the website of a case brief product that offers you more case briefs and we'll give you a free year of LSD+.
14-Day Free Trial
Unlimited access. Read as much content as you want during your trial with no device limitations. Cancel any time during your trial and keep access for the full 14 days.
Integrated Legal Dictionary
Lawyers and judges love to use big words. And Latin, for some reason.
Highlight a legal term in LSD Briefs and get an instant, plain English definition. Try highlighting contract or specific performance. No need to search or read through a list of definitions, simply highlight the words you don’t know and our LSDefine integration will instantly give you a definition to any of over 30,000 legal terms.
DeepDive
DeepDive allows you to explore legal cases like never before. DeepDive offers multiple levels of case summaries, which empowers you to quickly and easily find the information you need to stay on top of readings. Easily navigate through summary levels and click on any text to get more detail, all the way down to the original legal case text.
Brief anything. Instantly.
Our proprietary state-of-the-art system can instantly brief over 6,000,000 US cases. That means we can probably brief that case that your professor assigned last night when she sent you a poorly scanned pdf and told you to read every third paragraph. Or maybe she uploaded it to Canvas and didn’t really tell you to read it, but you know you probably should. Tenure does wild things to good people.
Social Learning with Chat and High Points
Study groups are a great way to learn and explore a case. LSD has chat rooms for each case to let you ask questions across the community and hear what other students struggled with and how they put it all together. Learn the key points of every case from other LSD+ users and share your knowledge with LSD High Points.
Real-Time Brief Feedback
Don’t settle for mistakes in briefs that have been there for 10 years and never fixed. Find an issue or something missing from a brief? Down vote and we will make improvements. All of our case brief editors graduated from from T14 law schools.