Del. SC upholds ruling for harness racing official

DOVER, Del. (Legal Newsline) - The Delaware Supreme Court upheld the jury's verdict in favor of a harness racing official who had been awarded damages from the Delaware Harness Racing Commission for reneging on its promise to reinstate him.

Justice Carolyn Berger authored the Feb. 15 opinion for the unanimous five-member Court.

Donald J. Harmon was hired as the Presiding Judge by the Commission in 1998. His job was to oversee harness racing and to supervise other racing officials.

In April 2003, Harmon was charged with changing the judging sheet for a qualifying race as a favor to the horse's owner, according to the opinion. In January 2004, Harmon was arrested by the Delaware State Police and charged with one misdemeanor and one felony based on his alleged alteration.

The Commission subsequently suspended Harmon without pay pending the outcome of the criminal case against him.

Harmon approached the Commission and asked if he would be reinstated if he was acquitted on both charges and he was advised that he would be, according to the opinion.

After his acquittal, the Commission decided not to reinstate Harmon in November 2004. In January 2007, Harmon filed a complaint.

The complaint alleged claims for breach of good faith and fair dealing, abuse of process, violation of the Delaware Whistle Blower's Act, and promissory estoppel.

After a five-day trial in January 2011, the jury entered a verdict on the promissory estoppel for $102,273 in favor of Harmon. In response, the Commission filed a motion for judgment as a matter of law or for a new trial and the trial court granted both motions.

Harmon appealed to the state's high court.

"The first issue is whether the Commission, as a state agency, can be held liable on a promissory estoppel claim," Berger wrote. "To prevail on a promissory estoppel claim, a plaintiff must establish that:

(i) a promise was made; (ii) it was the reasonable expectation of the promisor to induce action or forbearance on the part of the promisee; (iii) the promisee reasonably relied on the promise and took action to his detriment; and (iv) such promise is binding because injustice can be avoided only by enforcement of the promise.

"As a general rule, however, the state is not estopped in the exercise of its governmental functions by the acts of its officers. The trial court relied on the general rule in holding that Harmon's claim failed as a matter of law," Berger wrote.

"But, this Court has recognized an exception to the general rule in the context of employment. In Keating v. Board of Educ. of the Appoquinimink Sch. Dist, a teacher was assured by the school principal that her contract would be renewed, but the school district Board of Education decided not to rehire the teacher.

"The trial court rejected the Board's argument that promissory estoppel does not apply to 'creatures of the State.' This Court affirmed. Harmon's promissory estoppel claim is analogous, as it is based on the Commission's failure to reinstate him after promising to do so.

"Accordingly, we conclude that Harmon's claim does not fail as a matter of law."

The Court moved on to the second issue of whether there was sufficient evidence for a rational juror to find each element of a promissory estoppel claim.

"John Wayne was the Administrator of Racing during the relevant time period. Harmon asked Wayne to find out from the Commission whether he (Harmon) would be reinstated if he was acquitted on both charges," the opinion states.

"Wayne testified that he asked the commissioners, who looked at each other and then said he would be reinstated. The Commission authorized Wayne to advise Harmon accordingly.

"The trial court found that there was no promise because Wayne had no actual authority to transmit the Commission's decision to Harmon ... The trial court reasoned that, because the Commission must act by a vote and no vote was taken before the members said 'Yes,' Wayne could not have reasonably believed that the Commission wanted him to commit to reinstate Harmon.

"First, the fact that the Commission members all looked at each other before answering Wayne's question could be construed as a vote, albeit an informal one. Second, the Commission did not address all matters by vote," Berger reasoned.

"The second element of the claim is that the Commission reasonably expected Harmon to rely on Wayne's representations. If Wayne's testimony is credited, there is no real dispute about this point. The third element is that Harmon reasonably relied on the Commission's promise and took action to his detriment.

"Harmon testified that, but for the Commission's promise to reinstate him, he would have looked for other work in Delaware or another state. He was offered several horse training opportunities, but he could not pursue them because, if he did, he would not be allowed to return to his position as a judge for one year.

"Harmon also considered applying to be a judge in another jurisdiction, but decided that he could not start elsewhere and walk away from a new position as soon as he was reinstated in Delaware. This testimony, if credited by the jury, satisfies Harmon's burden of showing reliance to his detriment.

"The final element of a promissory estoppel claim is a finding that the promise must be enforced to avoid injustice."

Harmon had testified that he didn't look for other jobs or accept other employment during his suspension because he rightly expected to be reinstated. "The lost income constitutes reliance damages," Berger wrote.

"Finally, we consider the trial court's alternative decision to grant a new trial because the verdict was against the great weight of the evidence and shockingly high ... With respect to the amount of damages awarded, it appears that the jury understood the limits of reliance damages.

"Harmon's expert said he lost about $270,000 based on two years of lost earnings and interest. The jury award of $102,273 reflects approximately one year of lost earnings and, perhaps, a small amount of interest. That award is not shocking," Berger concluded.

"Based on the foregoing, the judgment of the Superior Court is reversed, and this matter is remanded for reinstatement of the jury verdict. Jurisdiction is not retained."