998 N.E.2d 752
Ind. Ct. App.2013Background
- Sterling financed NSE invoices via a verification-letter process; Hammert’s signed verifications asserted NSE work was complete and not subject to bonds, enabling Sterling to purchase invoices for 85%.
- Invoices 1–3 were verified; Invoice 2 paid 85% after verification, with a pay-when-paid contingency explained by Hammert’s.
- Hammert’s later sought payment conditions and NSE subcontractor payoff, while Sterling deposited funds under Invoice 2 but Hammert’s never paid Invoice 3.
- NSE went out of business; Hammert’s completed NSE’s work and paid subcontractors, leaving disputed amounts.
- Sterling filed suit in 2011 for Invoice 3 and Hammert’s counterclaimed for damages; trial court granted Hammert’s summary judgment; on appeal, the court reversed.
- The Indiana Court of Appeals held promissory estoppel applied based on the verification letters and reliance, reversing and remanding for judgment in Sterling’s favor on both the complaint and the counterclaim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether promissory estoppel bars Hammert’s denial of Invoice 3 | Sterling argues estoppel applies from Hammert’s verifications. | Hammert’s contends no promise or reliance to support estoppel. | Estoppel applies; Hammert’s is barred from denying Invoice 3. |
| Whether promissory estoppel restricts Hammert’s handling of Invoice 2 | Verifications created reliance on ensuring funds were available. | No detrimental reliance from the pay-when-paid arrangement. | Estoppel applies to restrict Hammert’s payment conditions on Invoice 2. |
| Whether the trial court erred in granting Hammert’s summary judgment | Cross-motions require judgment in Sterling on both claims. | Hammert’s deserved judgment based on verifications. | Reversed and remanded for summary judgment in Sterling on both the complaint and the counterclaim. |
Key Cases Cited
- Brokaw v. Roe, 669 N.E.2d 1039 (Ind. Ct. App. 1996) (estoppel principles in equitable disputes)
- Kacak v. Bank Calumet, N.A., 869 N.E.2d 1239 (Ind. Ct. App. 2007) (promissory estoppel elements in commercial transactions)
- Indiana Farmers Mut. Ins. Grp. v. Blaskie, 727 N.E.2d 13 (Ind. Ct. App. 2000) (standard for reviewing summary judgment)
- Quantum Corporate Funding Ltd. v. L.P.G. Associates, Inc., 246 A.D.2d 320 (N.Y. App. Div. 1998) (estoppel based on account-debtor assurances to a factor)
- Dimmitt & Owens Financial, Inc. v. Realtek Industries, 280 N.W.2d 827 (Mich. Ct. App. 1979) (estoppel when verification induces reliance)