Tuesday, November 02, 2010

equitable estoppel - application against the state

Wayne Moving and Storage v. School District of Philadelphia - October 28, 2010 - 3d Circuit Court of Appeals


Under Pennsylvania law, equitable estoppel consists of three elements: "1) misleading words, conduct, or silence by the party against whom the estoppel is asserted; 2) unambiguous proof of reasonable reliance upon the misrepresentation by the party asserting estoppel; and 3) the lack of a duty to inquire on the party asserting the estoppel." Chester Extended Care Ctr. v. Pennsylvania Dep’t of Pub. Welfare, 586 A.2d 379, 382 (Pa. 1991).

Equitable estoppel can be applied against the Commonwealth of Pennsylvania or its subdivisions. Wayne Moving, 2008 WL 65611, at *8; see, e.g., Chester Extended Care Ctr., 586 A.2d at 382 ("The doctrine of estoppel is an equitable remedy that may be asserted against the government in this jurisdiction.").

However, the Commonwealth or its subdivisions and instrumentalities cannot be estopped „by the acts of its agents and employees if those acts are outside the agent‟s powers, in violation of positive law, or acts which require legislative or executive action.‟" Cent. Storage & Transfer Co. v. Kaplan, 410 A.2d 292, 294 (Pa. 1980) (quoting Kellams v. Pub. Sch. Emp. Ret. Bd., 403 A.2d 1315, 1318 (Pa. 1979)).

The Supreme Court of Pennsylvania resolved the tension between these principles in holding that "[a]lthough it is the general rule that estoppel against the government will not lie where the acts of its agents are in violation of positive law, . . . this rule cannot be slavishly applied where doing so would result in a fundamental injustice." Chester Extended Care Ctr., 586 A.2d at 383 (citation omitted).