FILED Jul 12 2023, 8:30 am
CLERK Indiana Supreme Court Court of Appeals and Tax Court
ATTORNEYS FOR APPELLANT ATTORNEY FOR APPELLEES Mark J.R. Merkle Donald W. Shelmon Blake P. Holler Rensselaer, Indiana Matthew C. Branic Krieg DeVault LLP Carmel, Indiana
IN THE COURT OF APPEALS OF INDIANA
AgReliant Genetics, LLC, July 12, 2023 Appellant-Defendant, Court of Appeals Case No. 22A-CC-1827 v. Appeal from the Jasper Circuit Court Gary Hamstra Farms, Inc., The Honorable John D. Potter, Woolever Farms, Inc., Klemp Judge Farms, Inc., Trial Court Cause No. Appellees-Plaintiffs. 37C01-1803-CC-170
Opinion by Judge Tavitas Judges Crone and Weissmann concur.
Tavitas, Judge.
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 1 of 23 Case Summary [1] For several years, three Indiana Farms—Gary Hamstra Farms, Inc.
(“Hamstra”), Woolever Farms, Inc. (“Woolever”), and Klemp Farms, Inc.
(“Klemp”) (collectively “the Farmers”)—grew seed corn for AgReliant
Genetics, LLC (“AgReliant”). In 2018, AgReliant informed the Farmers that
AgReliant did not plan to grow seed corn that year, even though AgReliant’s
agent had already spoken with the Farmers about setting aside acreage to grow
seed corn that year. The Farmers brought an action for breach of contract and
promissory estoppel against AgReliant. Following a bench trial, the trial court
entered judgment in favor of the Farmers on a theory of promissory estoppel.
[2] AgReliant appeals and claims that: (1) the trial court clearly erred in granting
judgment on a claim of promissory estoppel; and (2) the trial court clearly erred
by awarding damages based on the benefit of the bargain instead of the
expenses the Farmers actually incurred relying on AgReliant’s statements. We
conclude that the trial court did not clearly err in determining that the Farmers
could recover under promissory estoppel, but we agree with AgReliant that the
trial court improperly awarded damages based on the benefit of the bargain
instead of reliance damages. Accordingly, we affirm in part, reverse in part,
and remand.
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 2 of 23 Issues [3] AgReliant presents two issues, which we restate as:
I. Whether the trial court clearly erred in finding that AgReliant made promises to the Farmers with the expectation that the Farmers would rely thereon.
II. Whether the trial court improperly awarded benefit-of-the- bargain damages instead of reliance damages.
Statement of Facts [4] This case involves three farms in Jasper County, Indiana—Hamstra, Woolever,
and Klemp. AgReliant is an agricultural corporation that markets crop seeds to
farmers throughout the Midwest. AgReliant does not grow the seeds itself.
Instead, it contracts with farmers to set aside certain land to grow seeds—in this
case, seed corn. Growing seed corn is different than growing grain crops, such
as field corn or soybeans. Growing seed corn requires that the seed corn crops
be isolated from other corn varieties to prevent cross-pollination. Farmers who
grow seed corn also must have knowledge of the crops being grown in
neighboring farms to prevent cross-pollination. Growing seed corn requires
two spring plantings: female seeds are planted in rows of four, with the fifth row
skipped. Male seeds are then planted in the skipped rows at a later date.
Because of the preparation required to plant seed corn, farmers need significant
advance notice to prepare a crop plan for the seed corn. Farmers start planning
for the next year’s seed crops during the harvest of the current year, in
cooperation with a seed corn company such as AgReliant.
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 3 of 23 [5] Although planting seed corn requires advance planning and work, it also
provides several benefits to the Farmers. For example, in years prior,
AgReliant paid for all fertilizers, pesticides, herbicides, and the cost of spraying
the chemicals. AgReliant also paid for detasseling 1 and harvesting costs.
Because the seed corn is purchased by AgReliant, the Farmers need not store
the corn. Seed corn is also worth more than regular field corn sold for grain.
Because of the higher sale price and lower production costs to the farmer,
growing seed corn is a substantial benefit to the Farmers.
[6] In the present case, Hamstra grew seed corn for AgReliant from 2006 to 2017,
except for the 2013 season. Woolever grew seed corn for AgReliant from 1992
to 2017. And Klemp grew seed corn for AgReliant from 2010 to 2017.
[7] Since 2007, the Farmers communicated with AgReliant’s field representative
Clif Jones. In years prior to 2017, Jones had obtained verbal commitments
each fall from the Farmers to plant seed corn for the upcoming season. The
final acreage to be planted, however, would not be determined until January or
February of the next year, by which time AgReliant had determined the
amount of seed corn it would need.
1 A “tassel” is the pollen-bearing inflorescence at the summit of a stalk of corn. See “Tassel,” American Heritage Dictionary (5th ed. 2022). Detasseling involves “pulling the tassels off the top of the corn,” which “improves the productivity of the seed corn when it is actually planted in the following growing season.” Rieheman v. Cornerstone Seeds, Inc., 671 N.E.2d 489, 491 (Ind. Ct. App. 1996), trans. denied.
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 4 of 23 [8] Eventually, the parties would sign a Production Agreement in January or
February, and this agreement included a Schedule B that listed the actual
acreage needed, the variety of corn to be grown, the number of male and female
rows to be planted, and the price to be paid. Schedule B was typically signed in
the spring of the year at issue. Though Schedule B was prepared and executed
by the Farmers before planting in the spring, AgReliant did not sign the
Production Agreement until after the crops were planted, which was often as
late as mid-summer. 2 Accordingly, final, written contracts were not fully
executed until after substantial performance by the Farmers had occurred.
[9] At issue here are the chain of events after the 2017 harvest. That fall, Jones
contacted the Farmers about what acreage and which land would be used to
grow seed corn for AgReliant in 2018. Jones approached Woolever in late
August or September 2018 during harvest season and “named the fields that he
expected [Woolever] to give him for the following year by farm name.” Tr.
Vol. II p. 145. Jones even provided Woolever with a map listing the fields or
farms he wanted Woolever to use to grow seed corn for the upcoming 2018
season. Woolever testified that this was the same procedure AgReliant had
used for over twenty-five years to secure acreage on which to grow seed corn.
In January 2018, Jones contacted Woolever and requested an additional 158
acres. Thus, Woolever set aside over 500 acres to plant AgReliant seed corn,
2 For example, the final 2017 contract between Klemp and AgReliant was not signed by AgReliant until June 5, 2017, and the 2016 contract between Hamstra and AgReliant was not signed by AgReliant until July 13, 2016.
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 5 of 23 and included this in his 2018 crop plan, which was initially prepared in
September 2017, in order to get the best discounts for the seed and supplies for
his other fields.
[10] Jones met with Klemp in the fall of 2017 and asked him to set aside 300 acres to
grow seed corn for AgReliant. Jones also gave Klemp maps of the specific
farms or fields that Jones wanted Klemp to use to grow the seed corn. Jones
initially told Klemp that he was unsure if AgReliant would need to grow seed
corn on an area known as the “Walters Farm,” but later confirmed that he
wanted to “lock that in.” Tr. Vol. II p. 103. Klemp’s testimony was
corroborated by a text message conversation between Klemp and Jones. In this
text message, Klemp stated he was “checking to make sure Walters is a go for
seed corn,” to which Jones replied, “Yes, we’d still like to put that in seed
corn.” Ex. Vol. IV, Plaintiff’s Ex. 11. Based on Jones’s statements, Klemp
prepared a 2018 crop plan that included 400 acres set aside to grow AgReliant
seed corn. Id., Plaintiff’s Ex. 10. Jones met with Klemp later in the fall of 2017
to confirm that Klemp wanted to grow seed corn for AgReliant in 2018. Jones
ultimately asked Klemp to set aside 400 acres for seed corn and the isolation
areas surrounding the corn. Klemp accordingly planned his next seasons’ crop
around the seed corn and purchased other seeds for the remainder of his land.
[11] Jones contacted Hamstra in October 2017 during the harvest and requested that
Hamstra set aside 700 acres to grow AgReliant seed corn in 2018. Jones later
told Hamstra that AgReliant “needed some more - a variety grown and wanted
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 6 of 23 to know if [Hamstra] had room to do another 160 acres.” Tr. Vol. II p. 205.
Hamstra agreed to do so and prepared his 2018 crop plan to include growing
seed corn for AgReliant on the fields requested by Jones.
[12] Although Jones was making these plans with the Farmers, AgReliant decided
not to grow seed corn in Indiana in 2018. In late December 2017, Jeremy
Thompson, Jones’s predecessor field agent and now a location manager and
Jones’s supervisor at AgReliant, learned of AgReliant’s decision to cease
growing seed corn in Indiana. Thompson, in turn, informed Jones of
AgReliant’s decision in early to mid-January 2018. On January 27, 2018,
Thompson and Jones met with each of the farmers to inform them personally
that AgReliant would not be using their services to grow seed corn that year.
Because of the long-term relationship that Thompson and Jones had with the
Farmers, “it was hard for them to tell [the Farmers] that.” Id. at 207.
[13] Caught unaware and having already prepared their upcoming crop plans to
include growing seed corn for AgReliant, the Farmers scrambled to buy seeds
for their land on which they had planned to grow seed corn. This caused them
to miss out on discounts they could have received had they purchased the seeds
in the fall of 2017. Woolever was unable to contract with any other seed-corn
companies due to the late date. Woolever ended up planting 386 acres of field
corn and 159 acres of soybeans on the 545 acres he had set aside for
AgReliant’s seed corn. In 2017, Woolever earned income of $944 per acre
growing AgReliant’s seed corn with expenses of $185 per acre, for a net profit
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 7 of 23 of $759 per acre. In 2018, Woolever earned a net profit of $162,062.10 for the
386 acres of field corn and $61,119.60 for 159 acres of soybeans, for a grand
total of $223,181.70. Assuming the same income and expenses from 2017, if
Woolever planted AgReliant’s seed corn, Woolever’s 2018 profits would have
been $413,655, which is $190,473.30 more than Woolever earned in 2018.
These calculations are listed in the chart below:
Woolever 2017 2018 Seed corn Field Corn Soybeans Income $ 944.00 $ 810.75 $ 561.00 Expenses $ 185.00 $ 390.90 $ 176.60 Net Profit $ 759.00 $ 419.85 $ 384.40 Total Acres 545 386 159 Total Profit $ 413,655.00 $ 162,062.10 $ 61,119.60 Total Profit $ 223,181.70
2018 Difference $ 190,473.30
[14] In 2018, Klemp planted 278 acres of field corn and 122 acres of soybeans on the
land he had originally planned to grow AgReliant seed corn. Klemp’s net profit
per acre for the field corn was only $50.76, and the net profit per acre for the
soybeans was a mere $23.74, for a total net profit of $14,111.28 for field corn
and $2,896.28 for soybeans. This was in stark contrast to the profit of $483.50
per acre that Klemp earned in 2017 planting AgReliant’s seed corn. Assuming
the same profit per acre from 2017 would have applied in 2018, if Klemp
planted AgReliant’s seed corn, he would have earned $193,400 instead of the
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 8 of 23 $17,007.56 he earned from field corn and soybeans—a difference of
$176,392.44. These calculations are listed in the chart below:
Klemp 2017 2018 Seed Corn Field Corn Soybeans Income $ 888.50 $ 655.50 $ 419.65 Expense $ 405.00 $ 604.74 $ 395.91 Net Profit $ 483.50 $ 50.76 $ 23.74 Total acres 400 278 122 Total Profit $ 93,400.00 $ 14,111.28 $ 2,896.28 2018 Total $ 17,007.56
2018 Difference $ 176,392.44
[15] Using similar calculations, Hamstra earned $222,771.85 less in 2018 compared
to 2017, when Hamstra grew seed corn for AgReliant:
Hamstra 2017 2018 Seed corn Field Corn Soybeans Income $ 711.62 $ 308.10 Expenses $ 372.64 $ 166.59 Net Profit $ 819.22 $ 338.98 $ 141.51 Total acres 406.33 266.38 139.95 Total Profit $ 332,873.66 $ 90,297.49 $ 19,804.32 2018 Total $ 110,101.82
2018 Difference $ 222,771.85
[16] On March 8, 2018, the Farmers filed a complaint against AgReliant claiming
breach of contract. On January 25, 2021, the trial court permitted the Farmers
to add a claim of promissory estoppel. A bench trial was held on February 24
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 9 of 23 and 25, 2022. On AgReliant’s motion, the trial court ordered the parties to
submit proposed findings of fact and conclusions thereon.
[17] On July 5, 2022, the trial court entered its findings of fact and conclusions
thereon and found that no contract was formed between the parties. With
regard to the Farmers’ claim of promissory estoppel, however, the trial court
concluded:
Promissory estoppel encompasses the following elements: “(1) a promise by the promisor; (2) made with the expectation that the promisee will rely thereon; (3) which induces reasonable reliance by the promisee; (4) of a definite and substantial nature; and (5) injustice can be avoided only by enforcement of the promise. See Citizens Fin. Servs. v. Innsbrook Country Club, Inc., 833 N.E.2d 1045, 1056 (Ind. Ct. App. 2005). Those elements are all present. In that case Citizens [n]ever used the term “promise” but representations were made about future conduct that would occur by Citizens which didn’t. Just as in this case the plaintiffs relied on the request for acreage by AgReliant. [AgReliant] knew or should have known based upon the parties’ courses of dealing that the plaintiffs would rely on the request to formulate their crop plan for the coming year. Their reliance was clearly reasonable and based upon the same course of action the parties took each year. Their reliance was substantial and to their financial detriment as damages will show below. Enforcement of that promise is necessary to make the plaintiffs whole for the year 2018 or an injustice would result.
Appellant’s App. Vol. II p. 28.
[18] The trial court calculated the damages based on the net profits the Farmers
would have earned in 2018 had they planted AgReliant’s seed corn according to
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 10 of 23 their 2017 profits, less the profits the Farmers actually realized for 2018.
Specifically, the trial court awarded damages to Hamstra in the amount of
$222,771.85, to Woolever in the amount of $190,473, and to Klemp in the
amount of $176,396, for a total damages award of $589,640.85. AgReliant now
appeals. 3
Facts and Procedural History I. Standard of Review
[19] Here, at AgReliant’s request, the trial court entered findings of fact and
conclusions thereon pursuant to Indiana Trial Rule 52. We, therefore, apply a
two-tiered review. Wysocki v. Johnson, 18 N.E.3d 600, 603 (Ind. 2014). We will
“affirm when the evidence supports the findings, and when the findings support
the judgment.” Id. We will not “set aside the findings or judgment unless [they
are] clearly erroneous,” and we must give “due regard . . . to the opportunity of
the trial court to judge the credibility of the witnesses.” Id. (citing Ind. Trial
Rule 52(A)). “Findings of fact are clearly erroneous only when they have no
factual support in the record.” Id. And a judgment is clearly erroneous “if it
applies the wrong legal standard to properly found facts.” Id. at 604. On
3 We held oral argument in this case on June 2, 2023, at the French Lick Springs Hotel in French Lick, Indiana, during the Indiana State Bar Association’s Solo and Small Firm Conference. We extend our thanks to the State Bar Association, the hotel, and their staff for their hospitality, and we thank counsel for the quality of their written and oral advocacy.
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 11 of 23 appeal, we review the trial court’s legal conclusions de novo. Gittings v. Deal,
109 N.E.3d 963, 970 (Ind. 2018).
II. Promissory Estoppel
[20] AgReliant disputes the trial court’s conclusion that the Farmers could recover
under a theory of promissory estoppel. 4
A party asserting promissory estoppel must establish five elements: “(1) a promise by the promissor (2) made with the expectation that the promisee will rely thereon (3) which induces reasonable reliance by the promisee (4) of a definite and substantial nature and (5) injustice can be avoided only by enforcement of the promise.”
Biddle v. BAA Indianapolis, LLC, 860 N.E.2d 570, 581 (Ind. 2007) (quoting First
Nat’l Bank of Logansport v. Logan Mfg. Co., 577 N.E.2d 949, 954 (Ind. 1991)).
[21] AgReliant contends that there was no evidence to support the trial court’s
determination that its agent made any promises to the Farmers or that
AgReliant expected the Farmers would rely on any promise that was made.
We address these contentions in turn.
4 AgReliant obviously does not challenge the trial court’s conclusion that the parties did not enter into a contractual agreement. The Farmers do not cross-appeal the trial court’s ruling regarding the lack of a contractual agreement.
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 12 of 23 1. Promise
[22] AgReliant contends that there was no evidence to support the trial court’s
determination that its agent made any promises to the Farmers. For purposes
of promissory estoppel, a promise is a “voluntary commitment or undertaking
by the party making it (the promisor) addressed to another party (the promisee)
that the promisor will perform some action or refrain from some action in the
future.’” Kacak v. Bank Calumet, N.A., 869 N.E.2d 1239, 1242 (Ind. Ct. App.
2007) (quoting Medtech Corp. v. Ind. Ins. Co., 555 N.E.2d 844, 847 (Ind. Ct. App.
1990)).
[23] AgReliant claims that Jones “made no promises or guarantees during [his]
preliminary conversations” with the Farmers. Appellant’s Br. p. 26. To
support its position, AgReliant cites the testimony of Klemp and Woolever,
who testified that Jones did not use the word “promise” or “guarantee” when
he discussed AgReliant’s plans to use the Farmers to grow seed corn in the
upcoming 2018 growing season. Tr. Vol. II pp. 126, 180. Jones also testified
that he never made any promises. AgReliant claims that Jones could not have
made such promises on its behalf because Jones did not yet know at that time
how many acres AgReliant would need for the following year.
[24] A promisor, however, need not use the words “promise” before there can be a
finding of promissory estoppel. “Promissory estoppel is based on the
underlying principle that ‘one who by deed or conduct has induced another to
act in a particular manner will not be permitted to adopt an inconsistent
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 13 of 23 position, attitude, or course of conduct that causes injury to such other.’” SWL,
L.L.C. v. NextGear Cap., Inc., 131 N.E.3d 746, 754 (Ind. Ct. App. 2019) (quoting
Brown v. Branch, 758 N.E.2d 48, 52 (Ind. 2001)) (emphasis added); see also 28
AM. JUR. 2D, Estoppel and Waiver § 51 (2023 Update) (“[I]t is recognized that no
special form of words is necessary to create a promise, for purposes of a
promissory estoppel claim[.]”). 5 Thus, the fact that Jones did not use the word
“promise” or similar words is not dispositive.
[25] To the contrary, there was evidence from which the trial court, sitting as the
trier of fact, could reasonably conclude that Jones, by his word and conduct,
effectively promised the Farmers that AgReliant would use the Farmers’ land to
grow seed corn in the 2018 season. Indeed, Klemp testified, “I would consider
it a promise when, every year in the – the previous years, we went through the
same procedure. You know, he wanted the acres and we [] accepted his offer to
take them. So I would consider that a promise.” Tr. Vol. II p. 126.
[26] As in past years, Jones approached the Farmers during the 2017 harvest and
requested that the Farmers set aside acreage to grow AgReliant seed corn.
Jones even requested the use of specific fields and acreage and gave the farmers
maps listing the farms and fields AgReliant wanted to use. After his initial
5 Other courts have reached similar conclusions. See, e.g., G & A Land, LLC v. City of Brighton, 233 P.3d 701, 704 (Colo. App. 2010) (noting that a promise may be stated in words or inferred from conduct); First Nat’l Bank of Cicero v. Sylvester, 554 N.E.2d 1063, 1070 (Ill. App. Ct. 1990) (noting that for purposes of promissory estoppel, “[a]n express promise is not required,” and a promise may instead be “inferred from conduct and words.”).
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 14 of 23 requests, Jones even contacted Klemp and Woolever and asked them if they
would reserve additional acreage to grow seed corn. This was the same
procedure AgReliant had used for years and even decades to secure acreage
from the Farmers to grow seed corn. Considering only the evidence favorable
to the trial court’s judgment, and the reasonable inferences that can be drawn
therefrom, we cannot say that the trial court clearly erred in determining that
AgReliant effectively or impliedly promised the Farmers that AgReliant would
grow seed corn on the acreage and fields in 2018.
2. Expectation of Reliance
[27] AgReliant next claims that there was no evidence to support a finding that
AgReliant expected that the Farmers would rely on any promise its agent made
because, in years prior, the parties always eventually executed a written
contract regarding the seed corn. AgReliant argues that it had to subjectively
expect the Farmers to rely on its statements. However, our Supreme Court has
adopted the following provision of Restatement (Second) of Contracts
regarding promissory estoppel:
A promise which the promissor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. . . .
RESTATEMENT (SECOND) OF CONTRACTS § 90 (quoted in First Nat’l Bank of
Logansport, 577 N.E.2d at 954) (emphasis added). Thus, the question is not
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 15 of 23 whether AgReliant, or its agents, subjectively expected the Farmers to rely on
its statements; instead, the question is whether AgReliant should have
“reasonably expect[ed] to induce action or forbearance” on the part of the
Farmers,” and did, in fact, “induce such action or forbearance[.]” Id.
[28] Again, considering only the evidence and reasonable inferences favoring the
trial court’s judgment, the trial court did not clearly err by concluding that
AgReliant made a promise upon which it should have reasonably expected the
farmers to rely. For years, AgReliant, through its agents, would contact the
farmers during the harvest season and request reservation of certain fields to
grow seed corn. The Farmers would agree and formulate their crop plans to
include growing AgReliant seed corn. During the 2017 harvest season,
AgReliant, through its agent Jones, again requested that the farmers set aside
certain fields to grow seed corn. Although AgReliant claims that it could not
know the precise acreage it would ultimately need, Jones did indicate in the fall
of 2017 the acreage needed for 2018; even later, he contacted Woolever and
Klemp and requested additional acreage. Given the prior course of dealing
between the parties, and Jones’s statements and conduct, the trial court could
reasonably conclude that AgReliant should have known that the Farmers
would rely on statements and requests made in 2017.
[29] AgReliant argues that the trial court could not rely on the prior course of
dealing between the parties to determine whether the Farmers established the
requirements of promissory estoppel. AgReliant contends that the course of
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 16 of 23 dealing between the parties is only relevant in contractual disputes. We
disagree.
[30] As noted above, “[p]romissory estoppel is based on the underlying principle
that ‘one who by deed or conduct has induced another to act in a particular
manner will not be permitted to adopt an inconsistent position, attitude, or
course of conduct that causes injury to such other.’” SWL, L.L.C., 131 N.E.3d
at 754 (quoting Brown, 758 N.E.2d at 52). Although we have found no Indiana
court that has explicitly stated that the prior course of dealing may be
considered, other jurisdictions have reached this conclusion. See Lige Dickson
Co. v. Union Oil Co. of Calif., 635 P.2d 103, 107 (Wash. 1981) (noting that, to
prove the elements of promissory estoppel, a promisee may offer evidence of
the course of dealing between the parties) (en banc); Peoples Nat’l Bank of Little
Rock v. Linebarger Const. Co., 240 S.W.2d 12, 17 (Ark. 1951) (considering the
course of dealing between the parties in concluding that defendant bank was
estopped from denying the promises it made to the plaintiff); see also Daniel A.
Farber, John H. Masterson, Beyond Promissory Estoppel: Contract Law and the
“Invisible Handshake,” 52 U. CHI. L. REV. 903, 932 (Fall 1985) (“A promise may
be stated in words, either orally or in writing, or may be inferred wholly or
partly from conduct. Both language and conduct are to be understood in the
light of the circumstances, including course of performance, course of dealing,
or usage of trade.”) (emphasis added) (citation omitted). Accordingly, we
cannot fault the trial court for looking to the prior course of dealing between the
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 17 of 23 parties in determining whether the Farmers had established the elements of
promissory estoppel.
[31] AgReliant also argues that the dealings between the parties show that the
parties always entered into written contracts and that their oral discussions were
not binding on either party. The fact that the parties eventually signed written
contracts is indeed relevant to the determination of the reasonableness of the
reliance; but just because the parties eventually signed written production
agreements in prior years does not negate the fact that the Farmers relied on the
statements and conduct of AgReliant’s agents in the fall of 2017 based on their
prior dealings with AgReliant. 6
[32] AgReliant also claims that, until the parties executed Schedule B, the specific
number of acres to be planted could vary, but once Schedule B was executed,
the acres needed and prices paid could not change. Thus, AgReliant claims, it
could not have known that the Farmers would rely on Jones’s statements in the
fall of 2017 regarding the amount of acreage AgReliant would request for seed
corn the following year. But this overlooks Jones’s request to the Farmers for
specific fields. Although the precise acreage may not have been established, it
6 AgReliant notes that, in 2012, Hamstra initially indicated to Jones that he was willing to grow seed corn for AgReliant in 2013. Hamstra, however, later told Jones that, due to a labor shortage, he could not grow seed corn during the upcoming season. AgReliant took no action against Hamstra at that time. AgReliant takes this as evidence that the oral discussions between the parties were never meant to be binding. We disagree. First, Hamstra testified that he informed Jones that he would be unable to grow seed corn for AgReliant very early on in the process, specifically “in the fall,” and “at the time that [AgReliant] harvest[ed] the 2012 crop.” Tr. Vol. II pp. 202. Moreover, the fact that AgReliant did or did not seek any recourse against Hamstra in 2012 does not mean that AgReliant’s statements and conduct in 2017 did not constitute a promise to the Farmers upon which they could reasonably rely.
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 18 of 23 is clear from the evidence that Jones told the Farmers that AgReliant planned to
use hundreds of acres of the Farmers’ land to grow AgReliant seed corn in
2018.
[33] Additionally, although the parties typically executed Schedule B before planting
in the spring, AgReliant did not sign the Production Agreement until after the
crops were planted. Accordingly, final, written contracts were not fully
executed until after substantial performance by the Farmers had occurred.
Thus, the fact that the parties had not yet signed Schedule B does not preclude a
finding of promissory estoppel.
[34] Furthermore, there was ample evidence showing that the Farmers did, in fact,
rely upon AgReliant’s promises. The Farmers testified that they not only set
aside acreage to grow AgReliant’s seed corn but also delayed purchasing other
seeds and fertilizers necessary to grow other crops. The Farmers also testified
that they had already developed marketing plans around the assumption that
they would grow seed corn for AgReliant and delayed purchasing the materials
required to plant other non-AgReliant crops.
[35] We find ample evidence supporting the trial court’s finding that this reliance
was reasonable. The question of what is reasonable is generally one for the trier
of fact. Yates v. Kemp, 979 N.E.2d 678, 683 (Ind. Ct. App. 2012) (citing Lesh v.
Chandler, 944 N.E.2d 942, 951 (Ind. Ct. App. 2011)), trans. denied. As detailed
above, for years AgReliant had approached the Farmers during the harvest
season to ask them to grow seed corn, the Farmers would agree, and AgReliant
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 19 of 23 would use the Farmers to grow its seed corn. We cannot say that the trial
court’s factual determination that the Farmers reasonably relied on AgReliant’s
statements and conduct was clearly erroneous. 7
[36] For all of these reasons, the trial did not clearly err in finding that the Farmers
established the elements of promissory estoppel.
III. Damages
[37] AgReliant argues that the trial court used an improper method to determine the
Farmers’ damages. If a party has established the elements of promissory
estoppel, “justice does not require the award of lost profits.” First Nat’l Bank of
Logansport, 577 N.E.2d at 956. Instead, when determining the damages due
under a theory of promissory estoppel, plaintiffs are entitled only to damages
based on the plaintiffs’ reliance. See Jarboe v. Landmark Cmty. Newspapers of Ind.,
Inc., 644 N.E.2d 118, 122 (Ind. 1994) (holding that the remedy for a claim of
promissory estoppel “is limited to damages actually resulting from the
detrimental reliance”); Hrezo v. City of Lawrenceburg, 934 N.E.2d 1221, 1231
(Ind. Ct. App. 2010) (“A successful party [in a promissory estoppel claim] is
entitled to reliance damages only.”), trans. denied.
7 The trial court also found that “[e]nforcement of [AgReliant]’s promise is necessary to make the [Farmers] whole for the year 2018 or an injustice would result.” Appellant’s App. p. 28; see also See Biddle, 860 N.E.2d at 581 (fifth element of a promissory estoppel claim is that “injustice can be avoided only by enforcement of the promise.”). The Farmers argue that there was sufficient evidence to support the trial court’s conclusion that injustice can be avoided only by enforcement of the promise. AgReliant, however, does not argue in its Appellant’s Brief that the Farmers did not establish the injustice element of promissory estoppel. We, therefore, need not address this element.
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 20 of 23 [38] AgReliant argues that the trial court erroneously based its award of damages on
the difference between what the Farmers would have earned in net profits in
2018 had they planted AgReliant’s seed corn and what they actually earned in
2018 growing replacement crops such as field corn and soybeans. This,
AgReliant claims, gave the Farmers the full benefit of a bargain that did not
exist. We agree.
[39] In First National Bank of Logansport, 577 N.E.2d at 956, our Supreme Court cited
with approval Illustration 8 from Section 90 of the Restatement (Second) of
Contracts, which provides:
A applies to B, a distributor of radios manufactured by C, for a “dealer franchise” to sell C’s products. Such franchises are revocable at will. B erroneously informs A that C has accepted the application and will soon award the franchise, that A can proceed to employ salesmen and solicit orders, and that A will receive an initial delivery of at least 30 radios. A expends $1,150 in preparing to do business, but does not receive the franchise or any radios. B is liable to A for the $1,150 but not for the lost profit on 30 radios.
RESTATEMENT (SECOND) OF CONTRACTS § 90 (1981) (emphasis added). Thus,
under a theory of promissory estoppel, the Farmers could recover damages
based only on their reliance on AgReliant’s alleged promises—not the profits
they would have realized had they grown seed corn for AgReliant in 2018. Yet
this is how the trial court calculated damages here.
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 21 of 23 [40] The Farmers argue that, given the equitable nature of the remedy of promissory
estoppel, the trial court had wide latitude to determine the damages to award.
But our Supreme Court has clearly held that only reliance damages are
recoverable under a theory of promissory estoppel, and we are bound by this
holding.
[41] AgReliant also contends that the Farmers failed to present competent evidence
of their reliance damages and instead asked only for benefit-of-the-bargain
damages. At trial, however, the Farmers argued for recovery under a theory of
both promissory estoppel and breach of contract, and the Farmers’ evidence
regarding damages focused on contractual damages. The trial court, however,
found that there was no contract, a finding that the Farmers do not contest on
appeal.
[42] AgReliant argues that we should, therefore, remand with instructions that the
trial court enter an award of zero damages. This would obviously frustrate the
purpose of the equitable remedy of promissory estoppel. The Farmers would
have a victory in name only—a favorable judgment under a theory of
promissory estoppel with no recoverable damages. The Farmers testified that,
based on their reliance on AgReliant’s promises, they lost the opportunity to
receive certain discounts on seed and chemicals they would have otherwise
been able to receive by purchasing such products earlier.
[43] Under these particular facts and circumstances, we opt to remand this cause for
the trial court to properly determine the damages incurred by the Farmers based
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 22 of 23 upon their reliance on AgReliant’s promises. See Wolfe v. Eagle Ridge Holding
Co., LLC., 869 N.E.2d 521, 528 (Ind. Ct. App. 2007) (reversing trial court’s
damages award and remanding for recalculation of plaintiff’s actual damages or
to award statutory liquidated damages).
Conclusion [44] The trial court did not clearly err in finding that the Farmers established the
elements of promissory estoppel. The trial court did, however, improperly
award benefit-of-the-bargain damages instead of reliance damages. We
therefore affirm the trial court’s judgment regarding promissory estoppel,
reverse the trial court’s damages award, and remand with instructions that the
trial court determine the Farmers’ reliance damages in the manner that the trial
court deems appropriate.
[45] Affirmed in part, reversed in part, and remanded.
Crone, J., and Weissmann, J., concur.
Court of Appeals of Indiana | Opinion 22A-CC-1827 | July 12, 2023 Page 23 of 23