Court Opinion

ID: 9668026
Source: CourtListenerOpinion
Date Created: 2023-08-24 02:00:37.286249+00
Date Added: 2024-06-11T18:15:42.464527
License: Public Domain

LAWRENCE G. CRAHAN, Judge,
concurring in part and dissenting in part.
I concur in the disposition of the breach of contract claim. I would affirm the judgment on the remaining counts as well.
As Orion correctly points out in its brief, Midwest’s response to the motion for summary judgment did not comply with Rule 74.01. Midwest did admit or deny each of the material facts set forth in separate numbered paragraphs in Orion’s motion but failed to “set out each additional material fact that remains in dispute” and failed to “support each factual statement asserted in the response with specific references to where each such fact appears in the pleadings, discovery or affidavits” as required by Rule 74.01(c)(2). Although Midwest did attach excerpts from various depositions, it did not state in its response what facts it contends these materials establish. Thus, the facts stated in Orion’s motion and properly supported by affidavits and exhibits must be deemed admitted for the purpose of the motion for summary judgment. Weiss v. Rojanasathit, 975 S.W.2d 113, 120 (Mo.1998). Even considering the materials attached to Midwest’s response, however, there is little, if any, dispute about the material facts.
Midwest’s president and sole shareowner is Laura Younghouse (“Younghouse”), who has been in the service station business for 17 years. For the first 13 years she worked for Rose City Oil Company, which like Midwest operated service stations with convenience stores. In 1993, she went into the same business herself. By July of 1998, Midwest owned service station/convenience stores in seven towns in southeast Missouri.
In 1996, Younghouse, on behalf of Midwest, decided to build and operate a combination convenience store/service station in Fruitland, Missouri. Younghouse left a voice mail message for Orion’s district sales manager Ries and he went to see her on March 27, 1996. Younghouse expressed interest in obtaining a franchise for three of Orion’s franchised products which Midwest would offer in the Fruit-land store: Hot Stuff Pizza, Smash Hit Subs and Cinnamon Street Bakery. During their meeting, Ries provided Young-house with Orion’s Uniform Franchise Offering Circular (UFOC), a document containing extensive disclosures required by federal law. 16 C.F.R. Sec. 436.1 et seq. Younghouse testified that, following the meeting, she did read this entire document. The UFOC provided to Young-house at the meeting included the following very specific caveats:
To protect you, we’ve required your franchisor to give you this informa-tion_ Study it carefully_ Read all of your contract carefully. Buying a franchise is a complicated investment. Take your time to decide. If possible, show your contract and this information to an advisor like a lawyer or an accountant. ...
Federal Trade Commission
Washington, D.C. 20580
The UFOC further provided:
You should also refrain from taking any other action making any commitments in regard to an ORION franchise *163until and unless you are notified in writing by ORION that your application for a franchise has been approved and that an ORION franchise has been issued in your name.
CAUTION
ANY FACT, INFORMATION, PROMISE, ASSURANCE, REPRESENTATION OR CIRCUMSTANCE COMMUNICATED TO YOU THAT IS NOT CONTAINED IN THE ATTACHED AGREEMENT OR THIS OFFERING CIRCULAR IS UNAUTHORIZED BY ORION AND SHOULD NOT BE RELIED UPON BY YOU IN DECIDING WHETHER TO PURCHASE AN ORION FRANCHISE.
The UFOC also contained a specimen copy of Orion’s standard franchise agreement, with none of the blank lines filled in. The specimen franchise agreement included the following provisions:
13.1 Interpretation. This Agreement, plus your application, are the entire and final agreement between you and us. You have not received or relied upon any representation, understanding, agreement or assurance not set forth herein and in our UFOC....
13.2 Governing Law ... This Agreement may be waived, modified or varied only by a writing signed by the parties. ... No custom, practice or course of dealing constitutes a waiver of any provision of this Agreement....
13.6 Review. You have reviewed this Agreement, our UFOC and other relevant information before entering into this Agreement with legal counsel or a professional business advisor of your choosing.
Younghouse admitted reading the UFOC in its entirety, including the express caution that she should refrain from taking any other action or making any commitments until notified in writing by Orion that the application for a franchise had been approved.
Following the March 27th meeting with Younghouse, Ries conferred with Paul Dirnberger of Rhodes Oil, one of Orion’s largest franchisees in the area, and determined that the grant of a franchise to Midwest would not interfere with Rhodes’ protected territories. Ries passed on the information he received from Dirnberger to Keith Watts, Orion’s regional sales manager, who told him to go ahead and proceed with the Fruitland location for Midwest.
On April 13, 1996, Ries and Younghouse met again. Ries told Younghouse that the grant of a franchise to Midwest would not violate any contractual agreements between Orion and Rhodes Oil. At that point, Younghouse “gathered” that Ries must have authority to approve franchises because he had gone to Rhodes Oil himself and obtained “clearance.” Younghouse also concluded that Ries had authority to approve the franchise because he told her at the April 13 th meeting that “We can proceed with the franchise.” According to Younghouse, she thought this created an oral contract for a franchise. Thereafter, Younghouse and Ries spoke on the telephone from time to time and Ries sent design layouts prepared by Orion for Midwest’s use.
Ries and Younghouse met for a third time on August 26, 1996. Younghouse advised Ries that Midwest had decided not to carry the Cinnamon Street Bakery Products and to focus instead on pizza and subs. At this meeting, Ries again provided Younghouse with Orion’s UFOC and standard franchise agreement.
On September 4,1996, Midwest received from Orion an unsigned franchise agreement for Midwest to execute if it still wanted to become an Orion franchisee. The agreement specified an opening date for the franchise of November 8, 1996, which was the target date selected by Younghouse. Younghouse and Ries spoke by telephone on September 13, 1996. Ac*164cording to Younghouse, Ries told her he would stop by the proposed location so he and Younghouse could sign the franchise agreement.
During this time period, Midwest apparently began airing radio ads announcing the imminent opening of the Orion franchise at Midwest’s new Fruitland store. An official of Rhodes Oil called William Langstan, one of Orion’s district managers of operation, and expressed concern. Langstan passed this information to Orion’s corporate headquarters. One of Orion’s officers then told Ries that he should not go through with his planned meeting with Younghouse on September 18 th because Orion was “evaluating the situation.” Ries did not appear at Midwest’s location on September 18 th. On September 19 th, Tom Kasper, Orion’s vice president of sales, decided not to grant or enter into a franchise agreement with Midwest. At the time that decision was made, Orion had not received from Midwest a signed franchise agreement, a signed equipment quote, a final layout and design drawing, a certificate of insurance nor, so far as can be determined from the record, any money. In sum, Midwest had made none of the commitments that would be required of a franchisee.
On September 30, 1996, Younghouse, having heard nothing from Ries or Orion, executed the franchise agreement and mailed it to Orion. The next day, Keith Watts, Orion’s regional sales manager, called Younghouse and told her Orion would not be granting Midwest a franchise. Orion confirmed this in a letter dated October 11,1996.
After learning Orion would not grant a franchise, Midwest made arrangements to become a licensee of Pecadilly Pizza and Subs, using much the same concepts as would have been used with Orion. Midwest began offering Pecadilly products on January 7, 1997, selling similar pizza and sandwiches to those it would have offered if it had obtained an Orion franchise.
The recognized elements of promissory estoppel in Missouri are: (1) a promise, (2) on which the party relies to his detriment; (3) in a way the promisor expected or should have expected; and (4) resulting in injustice which only enforcement of the promise can cure. Response Oncology, Inc. v. Blue Cross and Blue Shield of Missouri, 941 S.W.2d 771, 778 (Mo.App.1997). On the record before the court on summary judgment, there is no genuine issue of material fact that Midwest cannot establish any of these elements.
Ries’ statement to Younghouse in April that ‘We can proceed with the franchise” was not a promise that a franchise has been or would be granted. It was a truthful statement of Orion’s intent to work with Midwest to process its application, provide Midwest with the necessary information and, upon completion of that process, and assuming both parties were satisfied that the other was prepared to do what the franchise agreement would require it to do, to enter into a written franchise agreement. Although Young-house claims to have interpreted Ries’ statement to constitute an oral contract, such interpretation is unreasonable as a matter of law and inconsistent with her own actions. If Younghouse truly believed she had an oral contract in April, she would not have felt free to drop the Cinnamon Street Bakery products unilaterally in August. Younghouse does not claim that Ries ever told her she could dispense with a written agreement or any of the other requirements and still have a franchise.
The cases further establish that a party seeking to enforce a “promise” under the doctrine of promissory estoppel must show that his or her reliance was reasonable. Delmo, Inc. v. Maxima Elec. Sales, Inc., 878 S.W.2d 499, 505 (Mo.App.1994)(citing Otten v. Otten, 632 S.W.2d 45, 49 (Mo.App.1982)). As a matter of law, Younghouse’s alleged reliance on Ries’ alleged oral promise was unreasonable because she concedes that she was specifically apprised in writing, twice, that she should refrain *165from taking any action or making any commitments until and unless she was notified in writing by Orion that the application for a franchise had been approved and an Orion franchise had been issued in her name. I can find nothing in Ries’ conduct or statements that could conceivably be construed as waiving that requirement. To take action in reliance on Ries’ oral statement of intent to proceed with the franchise, having been previously and repeatedly apprised of Orion’s explicit admonition to refrain from such reliance is, as a matter of law, unreasonable.
Nor does the record reflect any actual reliance in the form of any material change of position by Midwest. Contrary to the suggestion by Midwest that it built a building 800 sq. ft. larger than it would have in anticipation of obtaining the franchise, Ms. Younghouse conceded that Midwest probably would not have constructed a smaller building if she had known she would not be awarded an Orion franchise. Indeed, the space that would have been used for the Orion products proved readily adaptable to a competitor’s similar products. Although it is true that if Midwest had been apprised sooner that Orion wasn’t going through with the deal it could have pursued other alternatives, this is true of any business relationship that remains unconsummated for whatever reason. Such failure to pursue alternatives cannot properly be characterized as “reliance” on the hoped for relationship; it is a well recognized risk of pursuing business opportunities that may not come to fruition.
Based on the very same language in the UFOC set forth above, Midwest likewise cannot establish that Orion should reasonably have expected reliance by Midwest prior to obtaining a signed agreement. Orion was entitled to assume that Midwest would heed its explicit and unambiguous warning. Even attributing Ries’ knowledge to Orion, there was nothing to indicate any material change in Midwest’s position in rebanee on any alleged promise of a franchise.
Finally, there is no evidence that there is any injustice to Midwest that can be avoided only by enforcement of the alleged promise.1 Although they were to be featured, Orion’s products would have been but a few of hundreds, if not thousands, offered at Midwest’s convenience store. Having failed to obtain an Orion franchise, Midwest promptly obtained a substitute from a competing firm. Ironically, if Midwest had heeded Orion’s admonition and not jumped the gun with its radio advertising, it very likely would have secured the Orion franchise it sought. Rhodes Oil had no contractual right to prevent a new franchise in Fruitland and but for Midwest’s premature advertising probably wouldn’t have voiced any objections before an agreement had been signed. All of the evidence before the trial court indicates that Orion had every intention of awarding Midwest a franchise if Rhodes Oil had not objected.
Application of the doctrine of promissory estoppel is to be used with caution, sparingly and only in extreme cases to avoid unjust results. Meinhold v. Huang, 687 S.W.2d 596, 599 (Mo.App.1985). This is not an extreme case. This is a garden variety business negotiation that didn’t pan out, at least in part because Midwest disregarded Orion’s explicit instructions not to do anything until the deal was consummated in writing. I find no injustice warranting application of the doctrine of promissory estoppel. If Midwest’s claim is allowed, should Orion have a counterclaim for whatever it expended in drawing plans for the display of Cinnamon Street Bakery products? I would hope not, but the question illustrates the absence of mutuality that underscores the need to apply the doctrine sparingly.
*166It is also appropriate to note that the manner in which franchises are offered is heavily regulated. 16 C.F.R. Sec. 436.1 et seq. These rules require extensive disclosures that would have afforded Midwest ample protection if it had heeded the information provided. As required by the regulations, Midwest was provided with the names of Orion’s officers, who could readily have cleared up any confusion Young-house may have had about Ries’ authority. If Midwest felt it necessary to materially change its position to accommodate the planned franchise, it could have insisted Orion expedite negotiation of a signed agreement. Midwest was specifically advised to consult with legal counsel but failed to do so. Given the substantial protections already enacted into law, it seems to me unreasonable to stretch a disfavored doctrine in an effort to protect those who ignore the many protections they already have. I would affirm summary judgment on the promissory estoppel count.
I would also affirm the judgment in favor of Ries on Midwest’s fraudulent misrepresentation claim. All of the evidence provided to the trial court on summary judgment establishes that Ries’ statement to Younghouse in April that “We can proceed with the franchise” was a truthful representation of Orion’s present intent. Thus, it was not actionable. See Trotter’s Corp. v. Ringleader Restaurants, Inc., 929 S.W.2d 935, 940 (Mo.App.1996).
For the foregoing reasons, I would affirm the judgment in its entirety.

. The majority does not, in fact, enforce any identifiable promise to any degree. The fact that some as yet unspecified measure of damages must be substituted for enforcement of a "promise” is but a further indication why the doctrine is inapplicable.