The opinion of the court was delivered by: Judge Leavitt
Argued: September 11, 2008
BEFORE: HONORABLE DAN PELLEGRINI, Judge, HONORABLE ROCHELLE S. FRIEDMAN, Judge,*fn1 HONORABLE MARY HANNAH LEAVITT, Judge.
Pasquele and Carol Peluso appeal an order of the Court of Common Pleas of the 26th Judicial District, Columbia County Branch (trial court) that dismissed their complaint for damages. The Pelusos seek damages from Hemlock Township and its former employee, Joseph W. Kistner, for the reduction in the value of their property that was occasioned by the Township's refusal to reissue the Pelusos an on-lot sewage treatment permit. The trial court held that the Pelusos' complaint was barred by the doctrine of governmental immunity. The Pelusos contend that the trial court erred because their complaint sought damages under a contract, not a negligence theory.
The facts pled in the complaint provide the factual background to this controversy. The Pelusos own Lot No. 1 in the Pinebrook Homes Development located in Bloomsburg, Pennsylvania. On March 21, 1995, the Township's Sewage Enforcement Officer, Joseph W. Kistner, issued a permit to allow construction of an on-lot sewage treatment system on Lot No. 1, located at the intersection of Pahl Road and Bridge Creek Road. The permit stated as follows:
If construction or installation of an individual sewage system . has not commenced within three years after the issuance of a permit for such system, the said permit shall expire, and a new permit shall be obtained prior to the commencement of said construction or installation.
Complaint, Exhibit A at 1. Relying upon this 1995 permit, the Pelusos purchased Lot No. 1 for the purpose of building a house thereon. When they sought to renew the permit several years after it had expired, the Pelusos were informed by the Township's current sewage enforcement officer that the permit could not be renewed because their lot was located on the flood plain. Without a sewage permit, the Pelusos cannot construct a house, which has caused the value of their lot to decline from $29,000 to $4,500.*fn2 The Pelusos seek damages from the Township and Mr. Kistner for the difference in value, i.e., $24,500.
The Township and Kistner (collectively, Township) filed preliminary objections in the nature of a demurrer asserting immunity under the statute commonly known as the Political Subdivision Tort Claims Act (Tort Claims Act), 42 Pa. C.S. §§8541-8542. The trial court agreed with the Township that the Pelusos' claim for damages was barred by governmental immunity and dismissed their complaint. The Pelusos then appealed to this Court.*fn3
On appeal, the Pelusos argue that the trial court erred because their complaint presented a type of contract claim to which the Tort Claims Act is irrelevant. Specifically, they assert that the complaint states a claim for damages under a theory of detrimental reliance, which may be asserted against a municipality or its employee notwithstanding governmental immunity. In response, the Township argues that the Pelusos' complaint sounds in negligence and points out that this Court has rejected attempts by plaintiffs to disguise a tort claim as a contract claim as a tactic for avoiding governmental immunity. The Township also argues that detrimental reliance is a type of defense but cannot sustain a separate cause of action.
We begin with a review of the principles of detrimental reliance, which this Court has explained "is another name for promissory estoppel." Travers v. Cameron County School District, 544 A.2d 547, 550 (Pa. Cmwlth. 1988). Promissory estoppel enables a person to enforce a contract-like promise that would be otherwise unenforceable under contract law principles. 28 AM. JUR. 2d. Estoppel and Waiver §57 (2008). For example, the doctrine allows a party to enforce a promise that is not supported by consideration. Crouse v. Cyclops Industries, 560 Pa. 394, 402, 745 A.2d 606, 610 (2000) (explaining that where "there is no enforceable agreement between the parties because the agreement is not supported by consideration, the doctrine of promissory estoppel is invoked to avoid injustice by making enforceable a promise.."). Unlike equitable estoppel, which is wholly a defensive doctrine, promissory estoppel can sustain an action brought to remedy the injustice that results from a promise not kept.*fn4 This Court has explained as follows:
Promissory estoppel is an outgrowth of equitable estoppel but, unlike equitable estoppel, promissory estoppel may serve as an independent cause of action. Paul v. Lankenau Hospital, 375 Pa. Superior Ct. 1, 543 A.2d 1148 (1988). Pennsylvania has long recognized promissory estoppel as a vehicle by which a promise may be enforced in order to remedy an injustice. See Fried v. Fisher, 328 Pa. 497, 196 A. 39 (1938).
Travers, 544 A.2d at 550 (emphasis added) (footnote omitted).
At the outset, therefore, the Township is wrong that detrimental reliance is an affirmative defense and not a cause of action.*fn5 The question, then, is whether the Pelusos have pled an action for detrimental reliance and whether their action is barred by governmental immunity.
To establish promissory estoppel, the plaintiff must prove that: (1) the promisor made a promise that would reasonably be expected to induce action or forbearanceon the part of the promisee; (2) the promisee actually took action or refrained from taking actionin reliance on the promise; and (3) injustice can be avoided only by enforcing the promise. Crouse, 560 Pa. at 403, 745 A.2d at 610. These factors are strictly enforced to guard against the "loose application" of promissory estoppel. Fried, 328 Pa. at 503, 196 A. at 43. The change in the plaintiff's position must be ...