## Facts

- Employees at a Chrysler Acustar plant maintained a workplace lottery pool for over five years, operated under unwritten but consistent practices.
- Donald Freeman organized the pool, kept a membership list limited to twenty participants, tracked payments, and customarily notified members when the jackpot reached a set threshold and the pool would play.
- Members generally contributed $2.20 per play; late or missed payments were commonly handled through reminders or coverage by coworkers rather than unilateral removal.
- Lionel Stepp was a longstanding participant and regularly assisted the group by photocopying tickets for distribution.
- Shortly before the drawing that produced a winning ticket, Stepp and Freeman had a serious work-related argument.
- For the winning drawing, Freeman did not request Stepp’s contribution and did not inform him that the pool was playing that week.
- After the group won, Freeman denied Stepp any share of the winnings on the ground that Stepp had not paid for that week.

## Issues

1. Whether the pool’s established course of dealing and unwritten rules created an implied-in-fact contract entitling Stepp to share in the winnings.
2. Whether Freeman was equitably estopped from denying Stepp’s participation where Freeman’s conduct and the parties’ history induced reasonable reliance.

## Decision

- The appellate court affirmed judgment for Stepp.
- The evidence supported finding an implied-in-fact contract among the pool members that included Stepp for the winning drawing.
- The evidence also supported applying equitable estoppel to bar Freeman from excluding Stepp based on nonpayment where Freeman deviated from the group’s customary notice and payment-reminder practices.

## Legal Principles

- An implied-in-fact contract may be formed through parties’ conduct and a consistent course of dealing, even without written terms, when that conduct shows mutual assent to a continuing arrangement.
- In assessing an implied agreement, a court may consider established practices such as membership limits, payment expectations, recordkeeping, and how late payments are routinely handled.
- Equitable estoppel may prevent a party from denying another’s interest when the party’s voluntary conduct reasonably induces reliance and denial would cause prejudice.
- Where one party controls notice and collection practices in an informal group arrangement, deviation from those practices can support estoppel when used to exclude a participant after a benefit materializes.

## Conclusion

The court held that the lottery pool’s longstanding, consistent practices created an implied contractual right for Stepp to share in the winnings and that Freeman, having managed the pool in a way that led Stepp to reasonably expect inclusion absent clear notice, was equitably barred from excluding him after the group won.


Stepp v. Freeman, 119 Ohio App. 3d 68, 694 N.E.2d 510 (Ohio Ct. App. 1997)