Parents will do anything for their children. Jeffrey Dow Sr. and Kathyrn Dow were no different. They raised their two children, Jeffrey Jr. and Teresa, on 125 acres of bucolic land that they planned to leave to their kids in the hope that both of them would live on the homestead one day.
And in 1999, Teresa did just that. With her parents’ permission, Teresa and her future husband, Jarrod Harvey, installed a mobile home on a choice piece of property near a lake. Soon after, they added a garage. But in 2003, Teresa’s husband died in a motorcycle crash, leaving Teresa and her son a sizable life insurance claim that she used to finance construction of a new home on the property. The Dows gave Teresa verbal permission to build the house and helped obtain the building permits.
It took over a year to build the house, and Jeffrey Sr. did much of the construction — laying the foundation, doing the carpentry, and installing underground electrical lines. While construction was underway, Teresa lent her brother $25,000 — an act that would soon haunt the family. By the time Teresa’s home was completed in May 2004 at a cost of $200,000, the relationship between Teresa and her parents and brother had deteriorated over how the loan to her brother should be repaid. Another sore point was that the Dows didn’t like Teresa’s new boyfriend and didn’t want him living in the house. As tensions grew, Teresa demanded a deed to the property so that she could get a mortgage to finance other projects around the house. When they refused, Teresa sued her parents for breach of contract. She sought a judgment compelling them either to convey the lakefront plot to her or to pay monetary damages. The Dows filed a counterclaim seeking a judgment declaring that Teresa had no right to the property.
How Would You Rule?
With no written contract — only a promise made long ago that the children would one day inherit the land — which party is in the right?
Relying on the legal doctrine of promissory estoppel, Justice Joseph M. Jabar of the Maine Supreme Judicial Court held for Teresa and ordered the Dows to either execute a deed or pay monetary damages to cover the expense of building the home. The legal doctrine is that when one makes a verbal promise, and the recipient of that promise relies heavily upon it, the promise-maker may be held to the same standards of a written contract.
–Harvey v. Dow, 2008
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