Severance pay; Breach of contract; Consideration; Promissory estoppel; Reliance

Holding that plaintiff did not state a legally sufficient claim for either breach of contract or promissory estoppel in this severance pay dispute, the court affirmed summary disposition for defendants-former employers. As to her breach of contract claim, the only allegation she made in her complaint as to consideration was that defendant-Phifer “stated that the severance pay he promised was ‘for all [her] work over the years and because [she] had not received any raises during that time period.’ Thus, the reasons for the promise cited in the complaint consist entirely of past performance of duties.” While all reasonable inferences are to be drawn in favor of the nonmoving party, “plaintiff provided only these past consideration reasons for the promises. To infer that there were additional reasons for the promises that plaintiff failed to mention is not a reasonable inference to make. Even if one infers consideration of continued service similar to a vesting requirement, which has been a prerequisite to make a severance pay promise binding, plaintiff fails to allege the necessary element of mutual agreement. In her complaint, plaintiff fails to specify the period of continued service required of her. In short,” she failed to allege “valid legal consideration and even if, as she argues, this element should be inferred, she has not alleged a mutual agreement.” The court held that her promissory estoppel claim was also insufficient due to lack of reliance. She “failed to allege any change of position, either in the form of action or forbearance, she undertook in reliance on the promise of severance pay. Plaintiff was paid for her work during the office closure period.” She contended that “defendants, as her employers and supervisors, and in a position of trust, should have reasonably expected the promise of severance would induce [her] to continue her employment through the closure period.” But the court found no reason “to infer actual acts or forbearance or reliance when plaintiff had the opportunity to allege such actions, but did not.”