California Evidence Code Section 623 - Equitable Estoppel
What is California Evidence Code Section 623?
Evidence Code Section 623 ties a person to a statement or conduct so that at a later time in court, they can't take a different position. The idea is that a person can't convince you of one fact out of court and then take a different position in court. The way the evidence code section reads is this " Whenever a party has, by his own statement or conduct, intentionally and deliberately led another to believe a particular thing true and to act upon such belief, he is not, in any litigation arising out of such statement or conduct, permitted to contradict it."
Lawyers are often unaware that this rule of fairness is actually a rule of evidence formalized in section 623. In the right case this principal of equitable estoppel can be very powerful. Here are some examples.
Example 1: Real Estate Purchase Agreement
Scenario: A seller of a residential property tells a buyer that the property has no zoning restrictions for building an additional unit, knowing the buyer intends to construct a guest house. The buyer, relying on this statement, purchases the property and begins planning the construction. Later, the seller attempts to void the sale in court, claiming they never guaranteed zoning permissions.
Application of Section 623: The buyer can invoke equitable estoppel to prevent the seller from denying their prior statement. The seller’s intentional representation about zoning led the buyer to act (purchase the property), and the buyer would face financial loss if the seller could contradict their claim. The court may estop the seller from denying the zoning statement, potentially upholding the sale or awarding damages. This example highlights how Section 623 protects parties who rely on clear representations in contractual agreements.
Example 2: Regulatory Compliance and Authorization
Scenario: A business owner, Jane, consults a state regulatory agency about whether her new product requires a specific permit. An agency official assures her that no permit is needed. Jane launches the product, investing significant resources. Later, the agency fines her for operating without a permit and claims the official’s advice was incorrect.
Application of Section 623: Jane could argue equitable estoppel against the agency. The official’s statement was an intentional representation that led Jane to believe she was compliant. She acted on this belief by launching her product, incurring costs. If the agency were allowed to contradict the official’s statement, Jane would suffer financial harm. A court might estop the agency from imposing the fine, citing Section 623, as seen in cases like People v. Ferguson (1933), where reliance on regulatory guidance prevented prosecution.
Example 3: Employment Contract Dispute
Scenario: An employer verbally promises an employee, Mark, a promotion with a higher salary if he relocates to a new office. Mark moves his family across the state based on this promise. After the move, the employer denies ever making the promise and refuses the promotion.
Application of Section 623: Mark can use equitable estoppel to prevent the employer from denying the promise. The employer’s statement was deliberate, and Mark relied on it by relocating, incurring moving costs and personal disruption. If the employer contradicts the promise in court, Mark would suffer detriment. Section 623 could bar the employer from denying the promise, potentially entitling Mark to damages or the promised promotion.
Example 4: Lease Agreement Misrepresentation
Scenario: A landlord tells a tenant that the commercial space they’re leasing includes parking spaces for customers. The tenant signs the lease and opens a retail store, relying on the parking availability to attract business. Later, the landlord claims the parking spaces belong to another tenant and attempts to charge extra for their use.
Application of Section 623: The tenant can invoke equitable estoppel to prevent the landlord from denying the parking representation. The landlord’s statement was intentional, and the tenant relied on it by signing the lease and opening the store. The tenant’s business could suffer without the parking, constituting detriment. A court might estop the landlord from contradicting their statement, ensuring the tenant’s access to the parking spaces as represented.
Practical Considerations
Proving equitable estoppel under Section 623 can be challenging. The relying party must demonstrate that the representation was clear and intentional, that their reliance was reasonable, and that they suffered harm. Courts also consider whether the party making the statement knew or should have known it would induce reliance. Gathering evidence, such as written communications, witness testimony, or documentation of actions taken, is critical to building a strong case.
Additionally, equitable estoppel is not a standalone claim but a defense or tool used in litigation to prevent unfair outcomes. It’s often raised in conjunction with other claims, such as breach of contract or fraud. Consulting an experienced attorney is essential to navigate the nuances of Section 623 and ensure its proper application.
Daniel Horowitz is a highly experienced trial lawyer who is expert in presenting cases to a jury and of course, expert in the Evidence Code. If you are going to trial you need a real trial lawyer. Call us for help.
