Ypsilanti v. General Motors Corp. – Case Brief

Charter Township of Ypsilanti v. General Motors Corp., 201 Mich. App. 128, 506 N.W.2d 556 (1993).

Facts: General Motors (D) sought tax relief from the town of Ypsilanti (P) in order to make improvements at its Willow Run factory. Two of the specific tax abatements at issue were granted in 1984 and 1988. At a public hearing the plant manager Williams stated that “upon completion of this project and favorable market demand, it will allow Willow Run to continue production and maintain continuous employment for our employees.”

General Motors later decided to move its production to another region of the country and P sued. The lower court held that D’s promises to continue production did not form a binding contract; however the court held that D was bound to continue production through promissory estoppel. D appealed.

Issue: Was General Motors obliged via promissory estoppel to continue production at the plant after seeking and obtaining tax abatements intended to induce General Motors to remain?

Holding and Rule: No. General Motors was not obliged via promissory estoppel to continue production after seeking and obtaining tax abatements intended to induce it to remain.

The elements of promissory estoppel are: 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. The remedy granted for breach may be limited as justice requires. Promissory estoppel requires an actual, clear, and definite promise. Reliance is reasonable only if it is induced by an actual promise. A determination that there was a promise will be overturned if it is clearly erroneous.

The court held that the trial court’s finding that defendant promised to keep Caprice and station wagon production at Willow Run was clearly erroneous. The fact that a corporation solicits a tax abatement and persuades a municipality with assurances of jobs is not evidence of a promise. The fact that a manufacturer uses hyperbole and puffery in seeking an advantage or concession does not necessarily create a promise. Almost all the statements the trial court cited were expressions of defendant’s hopes or expectations and not a promise.

Disposition: Reversed.

Drennan v. Star Paving Co.


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