Cases: Promissory estoppel

An employee’s claim that an employer promised to leave him $1 million in his will as inducement to get him to work raises a valid promissory estoppel claim, according to a recent decision from the U.S. District Court of the Western District of Kentucky.

Owsley Brown Frazier, a wealthy collector of historic firearms, regularly bought guns over the years from dealer Michael Salisbury. On these sales Salisbury charged Frazier a commission, which Frazier later denied he had agreed to. A few years into the relationship, Frazier decided to found the Frazier Historical Arms Museum in Louisville, which is home to such items as Sir Philip Sidney’s helmet, Geronimo’s bow, and George Washington’s rifle. He hired Salisbury to be the director, promising him $100,000 a year, and agreeing to leave him $1 million in Frazier’s will. Salisbury acquired many more items for the museum, collecting a commission on each one. When Frazier learned of the commissions, he fired Salisbury, and sued. Salisbury raised a number of counter-claims, including breach of contract and promissory estoppel.

Salisbury’s contract counterclaims must be dismissed, wrote Judge John Heyburn II, applying Kentucky law, because no employment term was ever specified. Thus there was no breach by Frazier even if Salisbury’s assertion that he’s entitled to the commissions is true, because he actually received the commissions.  But the promissory estoppel claim — that he went to work in reliance on the promise to leave him $1 million — was sufficient at least to survive a motion for summary judgment.

Frazier v. Salisbury, 2005 U.S. Dist. LEXIS 11219 (W.D. Ky, June 8, 2005).