Gorman v. Pima County (CA2 10/4/12)

A cautionary tale on working with government, though this one may actually allow an estoppel.

Gorman wanted Pima County to build a park for bicyclists. The County was receptive; over a few years there was a lot of communication back and forth and the County did some studies, issued a building permit, and amended an intergovernmental agreement to allow the park. Gorman, at the County’s request, spent money it aid of some of that. Then the neighbor’s complained and the County shut down the project. Gorman sued for damages – apparently her out-of-pocket, time spent on the project, etc. She sued for breach of contract and estoppel. The trial court dismissed her Complaint; she appealed.

On the breach of contract allegation, the Court of Appeals affirms. The problem is that there never was a written contract. Gorman relied principally on a letter signed by the County Administrator. Pima County argued that he had no authority to enter into such a contract. Gorman argued that the Pima County Code have him authority to sign grant applications and that her spending money out of her own pocket was a grant. But the Pima County Board of Supervisors had adopted a policy saying that it had to approve all grants. The court holds that this policy is consistent with the Code and is entitled to the force of law.

Gorman also claimed equitable estoppel. The court points out that she should have claimed promissory estoppel (i.e., a promise to do something in the future), that equitable estoppel (misrepresentation of present or past facts) is a defense, but says in a footnote that it doesn’t’ matter since she had alleged the necessary elements – though they’re the same, only the facts differ.

Its hard to establish an estoppel against government. You need not only a writing but, the court tells us, a “degree of formality.” It decides that whether that existed here – what with all the formal-looking things the County did (building permit, amendment to agreement) – is a question of fact, so the court reverses on the estoppel issue.

The County points out that this could lead to a lot of other estoppels. For governments this is a bad thing, since they are accustomed to being able to change their minds at a whim. On the other hand, the court tells us that “we have carefully considered the potential impact” of this decision – but it doesn’t otherwise discuss the matter. “The circumstances here are unlikely to recur,” it says, for reasons it doesn’t explain. And, anyway, “equity favors our resolution.” Pedants could argue that that doesn’t actually, really, technically, necessarily mean that Gorman should win her case – but what is the trial judge going to make of it? Talk about putting your thumb on the scale.

(link to opinion)