How To Prove A Texas Equitable Estoppel Defense
In Texas, a defense of Equitable Estoppel is defined as:
Equitable Estoppel is an estoppel that prevents a person from adopting a new position that contradicts a previous position maintained by words, silence, or actions when allowing the new position to be adopted would unfairly harm another person who has relied on the previous position to his or her loss.
It simply means:
A court will not grant a judgment or other legal relief to a party who has not acted fairly.
There are 5 elements of the defense:
- Element 1. The defendant made a false representation or concealed material facts. The defendant lied or hid important information that would have affected the other party’s decision, which is a key part of the Equitable Estoppel Defense.
Facts that might support this element look like:
* The defendant knowingly provided inaccurate financial statements to the plaintiff, which misrepresented the company’s profitability.
* The defendant failed to disclose ongoing litigation that could significantly impact the value of the business being sold.
* The defendant assured the plaintiff that all necessary permits were in place, despite being aware that several were still pending approval.
* The defendant omitted critical information about product defects that could affect the safety and usability of the items sold.
* The defendant falsely claimed to have extensive experience in the industry, misleading the plaintiff about their qualifications and expertise. - Element 2. The false representation was made with knowledge, actual or constructive, of those facts. This means that the person making a false statement knew, or should have known, that the information they provided was incorrect, which is important for proving that someone else relied on that misleading information.
Facts that might support this element look like:
* The defendant was aware of the true condition of the property but chose to conceal it during negotiations.
* The defendant had previously received reports indicating the inaccuracies of the statements made to the plaintiff.
* The defendant’s internal communications revealed an understanding of the misleading nature of the representations made.
* The defendant had a history of making similar false representations in prior transactions, indicating a pattern of deceit.
* The defendant failed to disclose critical information that they had obtained from a third-party inspection, demonstrating knowledge of the misrepresentation. - Element 3. The defendant intended the representation to be acted on. The defendant meant for their statement or promise to be taken seriously and relied upon by the other party, showing that they expected their words to influence the other person’s actions or decisions.
Facts that might support this element look like:
* The defendant made a public statement indicating that the information provided was accurate and reliable, encouraging others to rely on it.
* The defendant actively promoted the benefits of the representation, suggesting that it would lead to favorable outcomes for those who acted on it.
* The defendant had prior knowledge that the representation would influence the actions of the plaintiff and others in the community.
* The defendant provided the representation in a formal setting, such as a contract or official meeting, where reliance was expected.
* The defendant followed up with the plaintiff to confirm their understanding and reliance on the representation, reinforcing its intended effect. - Element 4. The representation was made to a party without knowledge or means of obtaining knowledge of the facts. This means that one party made a statement or promise to another party who had no way of knowing the truth behind it, which can prevent the first party from going back on their word if the second party relied on that information.
Facts that might support this element look like:
* The defendant made a representation regarding the property’s condition without disclosing prior issues known only to them.
* The plaintiff relied on the defendant’s statements, having no access to the property’s maintenance history.
* The defendant failed to provide documentation that would have revealed the true state of affairs to the plaintiff.
* The plaintiff was unaware of the relevant facts due to the defendant’s intentional concealment of information.
* The defendant’s representation was made in a context where the plaintiff had no reasonable means to verify its accuracy. - Element 5. The party without knowledge relied, to their detriment, on the representation. The party that didn’t have the necessary information trusted what the other party said, which ended up causing them harm or loss.
Facts that might support this element look like:
* The plaintiff made a clear representation regarding the availability of a specific service, which the defendant had no reason to doubt.
* The defendant, unaware of the true circumstances, proceeded to make significant financial investments based on the plaintiff’s representation.
* The defendant suffered financial losses after discovering that the service was not available as represented by the plaintiff.
* The defendant’s reliance on the plaintiff’s representation was reasonable given the context and the relationship between the parties.
* The plaintiff was aware of the true situation but did not disclose it, leading the defendant to rely on the misleading representation.
(See Johnson Higgins Inc. v. Kenneco Energy, 962 SW 2d 507 – Tex: Supreme Court 1998. Schroeder v. Texas Iron Works, Inc., 813 S.W.2d 483, 489 (Tex. 1991).)
If you’re representing yourself in court and plan to assert a Defense of Equitable Estoppel, having a Personal Practice of Law at Courtroom5 is essential. You’ll need to make informed decisions about what to file at each phase of your case and prepare legal documents that are supported by thorough legal research and a strong analysis of the facts. Equip yourself with the tools and knowledge necessary to effectively present your Defense of Equitable Estoppel.
Prove Your TX Equitable Estoppel Defense
U.S. Civil Cases Only