## Facts

- Lorraine and Robert Shoemaker obtained a $25,000 mortgage from Commonwealth Bank requiring them to “carry insurance” on the property.
- By January 1994, the Shoemakers’ homeowner’s insurance had expired.
- The Shoemakers alleged the bank sent a letter stating that if they did not obtain insurance, the bank might purchase insurance and add the premium to the loan balance.
- Mrs. Shoemaker alleged a bank representative later telephoned and stated the bank would obtain insurance and add the premium to the mortgage if the Shoemakers did not; she claimed she instructed the bank to do so.
- Commonwealth admitted sending the initial letter but denied the alleged phone promise as described by Mrs. Shoemaker.
- Commonwealth asserted it obtained insurance, notified the Shoemakers by a February 1994 letter, later chose to let the coverage expire effective December 1, 1994, and notified them by an October 1994 letter reminding them the mortgage required them to carry insurance.
- The Shoemakers denied receiving the February and October letters and claimed they did not learn the property was uninsured until after the loss.
- In 1995, the uninsured home was destroyed by fire; the Shoemakers alleged they continued making mortgage payments believing insurance premiums were included.

## Issues

1. Whether a mortgagor who is contractually obligated to insure the property may pursue promissory estoppel based on an alleged oral promise by the mortgagee to obtain insurance, and whether factual disputes precluded summary judgment.
2. Whether the evidence supported fraud and breach of contract claims against the mortgagee based on alleged representations and conduct regarding insurance coverage.

## Decision

- The court affirmed summary judgment for Commonwealth on the fraud and breach of contract claims.
- The court reversed summary judgment on the promissory estoppel claim.
- The court held that the alleged assurance that the bank would obtain insurance and charge the premium could constitute a promise actionable in promissory estoppel.
- The court found genuine issues of material fact regarding the existence and content of the alleged promise, the Shoemakers’ reliance and forbearance in not obtaining their own insurance, and whether enforcement was necessary to avoid injustice.
- The case was remanded for further proceedings on promissory estoppel.

## Legal Principles

- Promissory estoppel requires: (1) a promise made with a reasonable expectation of inducing action or forbearance, (2) actual, reasonable, and detrimental reliance, and (3) that enforcement is necessary to avoid injustice.
- Summary judgment is improper on a promissory estoppel claim when genuine disputes exist as to each element, including the reasonableness of reliance.
- A written agreement placing responsibility on one party (e.g., a mortgagor’s duty to carry insurance) does not necessarily bar promissory estoppel based on a later promise that foreseeably induces reliance.
- Where a defendant’s alleged promise is limited to obtaining insurance and the record shows insurance was obtained, fraud and contract theories premised on failure to maintain coverage may fail absent a supported misrepresentation or contractual undertaking to maintain coverage.

## Conclusion

The court allowed the Shoemakers to proceed on promissory estoppel because disputed facts could support an enforceable promise by the bank to obtain insurance and induce reasonable, detrimental forbearance, but it upheld dismissal of fraud and breach of contract claims where the bank’s undertaking was not shown to extend to maintaining coverage.


Shoemaker v. Commonwealth Bank, 700 A.2d 1003 (Pa. Super. Ct. 1997)