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Friday, October 17, 2008

Ind. Decisions - 7th Circuit decides one Indiana case today

In Classic Cheesecake Company v. JPMorgan Chase Bank (SD Ind., Judge Lawrence), a 17-page opinion, Judge Posner writes:

This appeal requires us to interpret a gloss that the Indiana courts have placed on their state’s statute of frauds: an oral agreement that the statute of frauds would otherwise render unenforceable creates a binding contract if failing to enforce the agreement would produce an “unjust and unconscionable injury and loss.” E.g., Brown v. Branch, 758 N.E.2d 48, 52 (Ind. 2001). The issue arises from the plaintiffs’ supplemental claims, 28 U.S.C. § 1367, which are based on Indiana law. The federal claim on which the district court’s jurisdiction was originally based, a claim based on the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691 et seq., was resolved in the plaintiffs’ favor but gave them only modest relief. The appeal challenges the court’s dismissal under Rule 12(b)(6) of the supplemental claims. * * *

The duration of reliance in the present case was much shorter than in the other cases that we have discussed, and the reliance is more easily imagined as based on hope than on a promise. And not all of it could be considered reasonable reliance, which is the only kind that can support a claim of promissory estoppel and a fortiori an invocation of the enhanced promissory-estoppel doctrine of the Indiana cases. * * * The level of reliance that could be thought to have been reasonable in this case was not comparable to that involved in the other cases. In the end, this case turns out to be a routine promissory estoppel case, and that is not enough in Indiana to defeat a defense of statute of frauds. AFFIRMED.

Posted by Marcia Oddi on October 17, 2008 12:23 PM
Posted to Ind. (7th Cir.) Decisions