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Pop''s Cones Inc. v. Resorts International Hotel Inc.

January 23, 1998

POP'S CONES, INC., T/A TCBY YOGURT, PLAINTIFF-APPELLANT,
v.
RESORTS INTERNATIONAL HOTEL, INC., DEFENDANT-RESPONDENT.



Before Judges Stern, Kleiner and Kimmelman.

The opinion of the court was delivered by: Kleiner, J.A.D.

[9]    Argued October 28, 1997

On appeal from the Superior Court of New Jersey, Law Division, Atlantic County.

Plaintiff, Pop's Cones, Inc., t/a TCBY Yogurt, ("Pop's"), appeals from an order of the Law Division granting defendant, Resorts International, Inc. ("Resorts"), summary judgment and dismissing its complaint seeking damages predicated on a theory of promissory estoppel. Affording all favorable inferences to plaintiff's contentions, Brill v. Guardian Life Ins. Co. of America, 142 N.J. 520, 536 (1995), we conclude that Pop's presented a prima facie claim sufficient to withstand summary dismissal of its complaint. See R. 4:46-2; Brill, supra, 142 N.J. at 540. In reversing summary judgment, we rely upon principles of promissory estoppel enunciated in Section 90 of the Restatement (Second) of Contracts, and recent cases which, in order to avoid inJustice, seemingly relax the strict requirement of "a clear and definite promise" in making a prima facie case of promissory estoppel.

I.

Pop's is an authorized franchisee of TCBY Systems, Inc. ("TCBY"), a national franchisor of frozen yogurt products. Resorts is a casino hotel in Atlantic City that leases retail space along "prime Boardwalk frontage," among other business ventures.

From June of 1991 to September 1994, Pop's operated a TCBY franchise in Margate, New Jersey. Sometime during the months of May or June 1994, Brenda Taube ("Taube"), President of Pop's, had "a number of Discussions" with Marlon Phoenix ("Phoenix"), the Executive Director of Business Development and Sales for Resorts, about the possible relocation of Pop's business to space owned by Resorts. *fn1 During these Discussions, Phoenix showed Taube one location for a TCBY vending cart within Resorts Hotel and "three specific locations for the operation of a full service TCBY store." According to Taube, she and Phoenix specifically discussed the boardwalk property occupied at that time by a business trading as "The Players Club." These Discussions included Taube's concerns with the then-current rental fees and Phoenix's indication that Resorts management and Merv Griffin personally *fn2 were "very anxious to have Pop's as a tenant" and that "financial issues . . . could easily be resolved, such as through a percentage of gross revenue." In order to allay both Taube's and Phoenix's concerns about whether a TCBY franchise at The Players Club location would be successful, Phoenix offered to permit Pop's to operate a vending cart within Resorts free of charge during the summer of 1994 so as to "test the traffic flow." This offer was considered and approved by Paul Ryan, Vice President for Hotel Operations at Resorts.

These Discussions led to further meetings with Phoenix about the Players Club location, and Taube contacted TCBY's corporate headquarters about a possible franchise site change. During the weekend of July 4, 1994, Pop's opened the TCBY cart for business at Resorts pursuant to the above stated offer. On July 6, 1994, TCBY gave Taupe initial approval for Pop's change in franchise site. In late July or early August of 1994, representatives of TCBY personally visited the Players Club location, with Taube and Phoenix present.

Based on Pop's marketing assessment of the Resorts location, Taube drafted a written proposal dated August 18, 1994, addressing the leasing of Resorts' Players Club location and hand-delivered it to Phoenix. Taube's proposal offered Resorts "7% of net monthly sales (gross less sales tax) for the duration of the [Player's Club] lease . . . [and] [i]f this proposal is acceptable, I'd need a 6 year lease, and a renewable option for another 6 years." In mid-September 1994, Taube spoke with Phoenix about the status of Pop's lease proposal and "pressed [him] to advise [her] of Resorts' position. [Taube] specifically advised [Phoenix] that Pop's had an option to renew the lease for its Margate location and then needed to give notice to its landlord of whether it would be staying at that location no later than October 1, 1994." Another conversation about this topic occurred in late September when Taube "asked Phoenix if [Pop's] proposal was in the ballpark of what Resorts was looking for. He responded that it was and that `we are 95% there, we just need Belisle's *fn3 signature on the deal." Taube admits to having been advised that Belisle had "ultimate responsibility for signing off on the deal" but that Phoenix "assured [her] that Mr. Belisle would follow his recommendation, which was to approve the deal, and that [Phoenix] did not anticipate any difficulties." During this conversation, Taube again mentioned to Phoenix that she had to inform her landlord by October 1, 1994, about whether or not Pop's would renew its lease with them. Taube stated: "Mr. Phoenix assured me that we would have little difficulty in concluding an agreement and advised [Taube] to give notice that [Pop's] would not be extending [its] Margate lease and `to pack up the Margate store and plan on moving.'" Relying upon Phoenix's "advice and assurances," Taube notified Pop's landlord in late-September 1994 that it would not be renewing the lease for the Margate location.

In early October, Pop's moved its equipment out of the Margate location and placed it in temporary storage. Taube then commenced a number of new site preparations including:

"(1) sending designs for the new store to TCBY in October 1994; and (2) retaining an attorney to represent Pop's in finalizing the terms of the lease with Resorts."

By letter dated November 1, 1994, General Counsel for Resorts forwarded a proposed form of lease for The Players Club location to Pop's attorney. The letter provided:

"Per our conversation, enclosed please find the form of lease utilized for retail outlets leasing space in Resorts Hotel. You will note that there are a number of alternative sections depending upon the terms of the deal."

As I advised, I will contact you . . . to inform you of our decision regarding TCBY.

By letter dated December 1, 1994, General Counsel for Resorts forwarded to Pop's attorney a written offer of the terms upon which Resorts was proposing to lease the ...


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