Alden v. Vernon Presley
637 S.W.2d 862 (1982)
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Rule of Law:
A promisee's reliance on a gratuitous promise is not reasonably justified, and thus cannot support a claim of promissory estoppel, if the promisee forgoes an opportunity to avoid the resulting loss after being informed that the promise will not be performed.
Facts:
- Jo Laverne Alden was the mother of Elvis Presley's fiancée.
- Presley gratuitously promised to pay off the mortgage on Alden's home as part of a larger promise to finance her divorce from her husband.
- In reliance on Presley's promise, Alden entered into a property settlement agreement with her husband on August 1, 1977, in which she agreed to assume the full mortgage indebtedness of $39,587.66.
- The property settlement agreement explicitly stated it was 'subject to Court approval.'
- Presley died on August 16, 1977, before paying the mortgage.
- On August 25, 1977, an attorney for Presley's estate informed Alden that the estate would not be paying the mortgage indebtedness.
- Subsequently, in April 1980, Alden sought and received court approval for her divorce and the original property settlement agreement, without informing the divorce court that the estate had repudiated Presley's promise to pay the mortgage.
Procedural Posture:
- Jo Laverne Alden sued the estate of Elvis Presley in the trial court to enforce the decedent's promise.
- The trial court denied recovery, holding that Alden did not rely to her detriment.
- Alden, as appellant, appealed to the Court of Appeals.
- The Court of Appeals reversed the trial court, finding for Alden on the theory of promissory estoppel.
- The Estate of Elvis Presley, as appellant, appealed to the Supreme Court of Tennessee.
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Issue:
Does a promisee's reliance on a gratuitous promise create an enforceable obligation under the doctrine of promissory estoppel when the promisee, after learning the promise will not be honored, proceeds to finalize a legal agreement that creates the very detriment she seeks to recover?
Opinions:
Majority - Fones, Justice
No. A promisee’s reliance on a gratuitous promise does not create an enforceable obligation where the reliance was not reasonably justified and did not result in an unavoidable loss. The court reasoned that Alden failed to prove the essential elements of promissory estoppel, specifically detrimental reliance and a loss suffered as a result of that reliance. The property settlement agreement in her divorce was not legally binding until approved by the court. After Presley's estate notified her on August 25, 1977, that it would not pay the mortgage, Alden had the opportunity to inform the divorce court of this material change in circumstances and seek relief from the agreement to assume the mortgage. By failing to do so and instead affirmatively seeking approval of the original agreement, her continued reliance on Presley's promise was no longer reasonably justified. Therefore, any financial loss she suffered was not a direct result of justifiable reliance on the promise, but rather her own failure to avoid the detriment when she had the legal means to do so.
Analysis:
This decision significantly clarifies the 'justifiable reliance' element of promissory estoppel by imposing a duty on the promisee to mitigate or avoid damages. The court establishes that reliance ceases to be justifiable once the promisee is aware of repudiation and has a clear legal avenue to prevent the anticipated harm. This prevents promissory estoppel from becoming a tool for a promisee to recover for a self-inflicted or avoidable loss. It underscores that the doctrine's purpose is to prevent injustice, and no injustice occurs when the promisee had the power to prevent their own injury.
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