Assume the verification of Peterson's accounting did not result in enough loan value to avoid needing title to the vacant land and that the lien release was critical for the loan to proceed. Using the materials provided to you in the attached library( assume that the applicable precedent is from the fictional jurisdiction of the state of Green provided to you in the attached library), please address all elements of Ms. Ivy's negligence cause of action against Bank of Land. Assume Bank of Land is liable for its employees' action. Trying to understand how the 4 elements can be broken down and applied to the case.

Plantiff's OR The buyerCARSON'S INN In 1982, Sophia Ivy obtained her bachelor's degree in Business Administration from California State University, Chino, specializing in the hospitality industry. After working for fifteen years as a manager at the Hilton Hotel in Redwood, Green, Ms. Ivy decided to go on her own and acquire an existing hotel located in Laguna in the state of Green and convert it to a bed and breakfast inn. After locating a suitable hotel, known as Carson's Inn, Ms. Ivy conducted an in-depth study of the market and decided that the hotel possessed an immense potential if it were to become a bed and breakfast inn. She contacted the listing agent of the hotel, Gibson Miller, and obtained listing preliminary data on the property, including financial statements of the hotel for the past three agent years. The hotel was listed for sale for $4.5 million. - Seller of first property After conducting her own due diligence, Ms. Ivy, Alison Rivera, the hotel owner, and Mr. Miller met on January 5, 2005 and had a preliminary discussion on the purchase and sale of the hotel. Following the meeting, Ms. Rivera called Ms. Ivy and offered her the property for $4.3 million, excluding the furniture. The sale was to conclude following a 45-day escrow. On January 6, 2005, Ms. Ivy faxed Ms. Rivera a letter stating the following: "Thank you for offering to sell me the hotel you own, Carson's Inn, located at 3020 Main Avenue, Laguna, Green. I am excited to accept your offer to sell the hotel for $4.3 million, excluding the furniture. However, since it would take me some time to arrange financing, I would like to close escrow within 60 days. I look forward to working with you on this deal. Sincerely, Bank originating first Signed /S/ Sophia Ivy" loan . The same day, Ms. Ivy contacted a number of lenders to secure financing for the deal. Most lenders that she contacted turned her down due to her poor credit record and lack of business ownership experience. However, on January 30, 2005, she managed to obtain a financing commitment from one lender. It was a sixty-day firm commercial loan commitment from Interstate Bank. The loan commitment required that Interstate Bank would obtain a first priority lien on the as hotel property, as well as on an unrelated undeveloped parcel of land that Ms. Ivy owned in Lagoon Beach, Green. Ms. Ivy had acquired the land in Lagoon Beach in 1984 and had managed to pay off the mortgage on that property on November 1, 2004. However, the lender on the Lagoon Beach property, Bank of Land, had failed to remove the lien it had on that property despite the language in the deed of trust requiring it to promptly record a reconveyance of its lien on the property upon payment in full of the underlying loan. Ink For the next sixty days following her faxed response, Ms. Ivy vigorously attempted to get Bank of 5 Land to remove its lien on the Lagoon Beach property, but to no avail. She specifically mentioned . to a number of officers at the bank that she would need Bank of Land to reconvey the lien on her Lagoon Beach property as soon as possible so that she could pledge the property as collateral for a new loan she was in the process of obtaining to finance a hotel acquisition. Despite repeated assurances from various officers at Bank of Land, no one at Bank of Land initiated and In most states, lenders typically use the deed of trust as the mechanism for holding a security interest in real property. In a deed of trust transaction, the borrower deeds to the trustee the property that is to be put up as security for the mortgage obtained from the lender. The trust agreement usually gives the trustee the right to foreclose or sell the property if the debtor fails to make a required payment on the debt. However, under the typical "reconveyance clause" in a deed of trust, upon full repayment of the debt, the lender must request the trustee to promptly reconvey the property and release any liens on it too.followed up on the processing of the reconveyance request. The failure resulted due to the various internal turnovers in Bank of Land. prepared To further her chances of obtaining a loan from the Interstate Bank (and to try and persuade them ,Statements the finacial to lend the money without a lien on the vacant land,) Ms. Ivy contracted for an appraisal report from an independent company. Ms. Ivy hired Peterson Accounting to prepare an appraisal using techniques that banks generally employ to determine the loan value of small hotels. of the case Unfortunately, that valuation did not result in enough loan value to justify the hotel property as the sole collateral on the loan. Hence, to obtain the loan from Interstate Bank, she still needed clear title to the vacant land. On March 28, 2005, following the sixtieth day, Interstate Bank informed Ms. Ivy that its previous loan commitment of sixty days had expired. Ms. Ivy desperately attempted to obtain alternative financing, but was unable to locate another loan. Hoping to get extra time, Ms. Ivy contacted Ms. Rivera and Mr. Miller and asked for a thirty days extension for the consummation of the deal: Mr. Miller then informed Ms: Ivy that Ms: Rivera had already entered into a sale agreement with another buyer and hence the property was no longer available for sale. Not giving up on her dream of owning a bed and breakfast Inn, Ms. Ivy located another hotel, similarly situated, that was virtually identical to the one she pursued previously. Later in 2005, Ms. Ivy acquired it for $4.7 million, excluding the furniture. Ms. Ivy is now seeking a recovery for her damages of lost opportunity to acquire the first Laguna hotel. She is suing her former mortgage lender, Bank of Land, for negligent failure to promptly remove the lien on her Lagoon Beach property. RequiredCOMMERCIAL ESCROW COMPANY, APPELLANT, v. ROCKPORT REBEL, INC., APPELLEE agreement was drawn up and signed which was entitled "Addendum to Contract to No. 13-89-004-CV Purchase the Best Western Rockport Rebel." The Addendum further stated that District Court of Civil Appeals of Green, Thirteenth "seller will deposit into an escrow account . . . the sum of $ 25,000.00 as required in this contract and can be released only upon the written approval of the seller . . . [and] that if August 31, 1989 this contract is not completed (funded, closed, consummated), then this money will be fully refunded to seller. . ." The cashier's check for $ 25,000.00 which was accepted JUDGES: Norman L. Utter, Robert J. and deposited by Commercial Escrow listed Seerden, and Fortunato P. Benavides, J.J. "Best Western Rebel Rockport" as remitter. OPINION BY: UTTER OPINION: Rockport Rebel, Inc., the plaintiff, On July 21, 1986, Commercial Escrow brought suit against Commercial Escrow issued an escrow receipt improperly Company, the defendant, alleging that showing that the money had been received defendant had disbursed funds they were from TDL. Rockport Rebel notified holding in escrow for plaintiff without Commercial Escrow of its error around the plaintiff's prior authorization. A jury found end of July. However, on August 13, 1986, appellants liable for negligence. Based on Commercial Escrow released the money to the jury's findings, the trial court ordered Citywide, the party with whom TDL filed an application for financing the purchase of the Rockport Rebel, Inc. recover from motel. Commercial Service did so without Commercial Escrow Company ("Commercial Escrow") the total amount of $25.000.00 Rockport Rebel's prior knowledge or plus pre- and post-judgment interest. We approval. On September 19, 1986, Rockport Rebel learned that the money had affirm the judgment of the trial court. been released to Citywide. Since that time, Rockport Rebel, Inc. ("Rockport Rebels") Citywide has ceased to exist and the sale of the motel was not completed. Commercial owned a Best Western motel. Since Escrow, however, refused to return the $ Rockport Rebel was having difficulty 25,000.00 in accordance with the obtaining long-term financing for the motel, Addendum. Plaintiff subsequently filed this they decided to sell the motel if they could suit for negligence. find a buyer, TDL Development Company (TDL) subsequently offered to purchase the property and sought financing through Discussion: Citywide Financial Services ("Citywide"). Citywide, however, required a $ 25,000.00 Negligence is conduct which falls below the loan commitment fee be placed in escrow standard established by law for the with Commercial Escrow before they would protection of others." (Rest.2d Torts, $ 282.) proceed. TDL was unable to put up that 'Every one is responsible, not only for the amount. Since Rockport Rebel needed to result of his willful acts, but also for an injury sell the motel, they agMiller, as the seller, to occasioned to another by his want of put up the twenty-five thousand dollars. ordinary care or skill in the management of his property or person, except so On or about July 10, 1986, Rockport Rebel far as the latter has, willfully or by want of entered into a contract to sell The Best ordinary care, brought the injury upon Western Rockport Rebel Motel to TDL. As himself." ($ 1714, subd. (a).) agMiller between the parties, because of TDL's inability to pay $ 25,000.00 in earnest A. Duty of care: The threshold element of a money, Rockport Rebel agMiller to put that cause of action for negligence is the amount into an escrow. An escrow existence of a duty to use due care towardan interest of another that enjoys legal of care to the plaintiff. Generally, a protection against unintentional invasion. defendant owes the plaintiff a duty to act as (Rest.2d Torts, $ 281. "Courts, however, would an ordinary prudent person under the have invoked the concept of duty to limit same or similar circumstances. Specifically, generally 'the otherwise potentially infinite in performing services for a client, an escrow liability which would follow from every company has the duty to strictly follow negligent act ....' " ( Thompson v. County of instructions drafted in the escrow Alameda (1980) 27 Cal.3d 741, 750). instructions. A defendant owes a duty of care to all Here, the jury had ample evidence to foreseeable plaintiffs. In a sense, judges conclude that Commercial Escrow breached draw an imaginary line around the defendant its duty of care to the plaintiff. The escrow and say that she owes a duty to the people instructions that were provided to within this circle, but not to people outside it. Commercial Escrow specifically required A plaintiff is foreseeable if he was located Rockport Rebel's consent before the within the foreseeable zone of danger. A defendant also owed the plaintiff a duty of $25,000 funds held in escrow could be care where a contractual relationship released to anyone. Commercial Escrow between the parties requires the defendant failed to live up to that instruction and hence to act in a certain way towards the plaintiff. has breached its duty of care owed to Jim Walter Homes, Inc. v. Reed, 711 Rockport Rebel. S.W.2d 617, 618 (Tex. 1986). Lastly, the defendant owes the plaintiff a duty to act C. Causation: Third, to prevail, a plaintiff with care in cases where she voluntarily must demonstrate that there is a causal assumes the duty to act by promising to the connection between the negligent conduct plaintiff to behave in a certain way. and the resulting injury. To determine whether the defendant's negligence has Here, Commercial Escrow owes Rockport caused plaintiff's injuries, the plaintiff must Rebel a duty to strictly follow instructions of demonstrate that but for the defendant's funds disbursement pursuant to a negligence, the plaintiff would not have contractual provision in the "Addendum to sustained the loss. Here, but for Commercial Contract to Purchase the Best Western Escrow's failure to follow the escrow Rockport Rebel." Also, Commercial Escrow instructions, the $25:000 would have owes Rockport Rebel a duty because remained in escrow and Rockport Rebel Rockport Rebel was a foreseeable plaintiff would have been able to recover it from Commercial Escrow once the sale within the zone of danger. Commercial transaction with TDL collapsed. Escrow and Rockport Rebel entered into a contract that called upon Commercial Escrow to maintain control over Rockport D. Damages: Lastly, the plaintiff must demonstrate that she sustained actual loss Rebel's $25,000 deposit to facilitate the or damage resulting from the negligence. consummation of the sale transaction Here, following the collapse of the sale between Rockport Rebel and TDL. The transaction between Rockport Rebel and escrow instructions specifically required TDL, Rockport Rebel lost its $25,000 Commercial Escrow to obtain the pre- deposit that was transferred to Citywide approval from Rockport Rebel before bank. releasing any of that deposit. Hence, it was foreseeable to Commercial Escrow that if it The judgment is affirmed. were to release the funds without the permission of Rockport Rebel, then Rockport Rebel could potentially lose control over those funds. B. Breach of duty of care: To prove negligence, a plaintiff is required to show not only that the defendant owed him a duty of care, but also that he had breached his dutyCAYETANO J. APABLASA, Appellant, v. MERRITT & COMPANY (a Corporation)., Respondent brochures, and a concentrated direct-sales Civ. No. 24046 effort, the returns should be most gratifying. I would like to offer to purchase your invention for $100,000 as a bonus payment Court of Appeal of Green, Second Appellate to be paid from twenty percent of the net District, Division One earnings, and when this has been paid, that you should receive a continuing percentage December 29, 1999 of the net earnings at the rate of ten percent. In this way the product would pay its way out for all concerned and would give you a much JUDGES: Lillie, J. Wood, P. J., and Fourt, J., concurred, greater return as well as a permanent income. OPINION BY: LILLIE "Trusting this would be acceptable to you, and looking forward to hearing from you OPINION: Plaintiff's action for damages for quite soon, I am breach of contract is predicated on a written contract entered into September 20, 1995. Sincerely yours," Hearing the case without a jury, the trial judge directed that the issue of the existence On August 27, 1995, plaintiff, referring to of the contract first be tried; and at the close defendants' letter of August 24, responded of plaintiff's case the judge entered a in part: judgment decreeing that no contract was entered into, existing, or was ever executed. "After careful consideration I have decided to accept your proposition as outlined in Contending that the record discloses the your letter to me of August 24th, 1995 with formation of a contract upon a series of this proviso: that you agree to put this product in production within a definite period correspondence passing between the of time from the date of the signing of any parties, appellant argues that respondent, by agreement between us. letter dated August 24, 1995 made an offer which he accepted by letter of September "I would welcome an opportunity to discuss 20, 1995. this matter with you at your earliest convenience." We conclude that no reasonable construction of the evidence will admit a That the letter dated August 27, 1995, could binding contract between the parties; and not constitute an acceptance finds support in that the correspondence amounts to nothing well-established authority and in the only more than an offer that was never accepted reasonable interpretation that can be given relating to various plans directed toward to the writing itself. evolving a practical program to produce, merchandise and market plaintiff's invention. It is fundamental that without consent of the parties, which must be mutual (Civ. Code, $ The genesis of the controversy is found in a 1565), no contract can exist (Civ. Code, S set of letters growing out of defendant's 1550). Consent cannot be mutual unless all interest in a device invented by plaintiff. On parties agree upon the same thing in the August 24, 1995, the first letter was written same sense (Civ. Code, $ 1580). Hence, by defendant to plaintiff: terms proposed in an offer must be met exactly, precisely and unequivocally for its "I wish to thank you very much for the acceptance to result in the formation of a courtesy and time extended to me in your binding contract (Laird v. Mcphee, 90 office yesterday. Cal.App. 136 [265 P. 501]; Caldwell v. Dalaray Mines, Inc., 68 Cal.App.2d 180 [156 "I think you have a very fine invention. P.2d 52]; American Aeronautics Corp. v. Undoubtedly with the right design worked Grand Central Aircraft Co., 155 Cal.App.2d out for the various models, proper sales 69 [317 P.2d 694]); and a qualifiedacceptance amounts to a new proposal or requiring equipment, cost outlay, raw counteroffer putting an end to the original materials, designs, patterns, samples, etc. offer ( Niles v. Hancock, 140 Cal. 157 [73 P. And what plaintiff means by the term 840]; Civ. Code, $ 1585; Hunkins-Willis etc. "production" is not clear, but by the "proviso" Co. v. Los Angeles etc. Co., 155 Cal. 41 199 he seeks to specifically place on defendants P. 369]; Patterson v. Clifford F. Reid, Inc., the burden of putting "this product into 132 Cal.App. 454 [23 P.2d 35]; Lawrence production" within a definite time to be later Block Co. v. Palston, 123 Cal.App.2d 300 determined. [266 P.2d 856]; American Aeronautics Corp. v. Grand Central Aircraft Co., 155 An analysis of plaintiff's letter points up Cal.App.2d 69 [317 P.2d 694]). An offer inescapable conclusion: a new offer "must be approved in the terms in which it is modifying defendants' original plan to made. The addition of any condition or merchandise and market the invention was limitation is tantamount to a rejection of the introduced for the first time by plaintiff -- its original offer and the making of a counteroffer (Alexander v. Bosworth, 26 "production". Cal.App. 589 [147 P. 607]). A counteroffer containing a condition different from that in We find nothing in the record before us the original offer is a new proposal and, if evidenceng any meeting of the minds of the not accepted by the original offeror, amounts parties on any matters relating to the to nothing ( Cooper v. Stansbury, 28 manufacture, production, development, Cal.App. 444 [152 P. 948])." (Ajax Holding merchandising or marketing of plaintiff's Co. v. Heinsbergen, 64 Cal.App.2d 665, 669 invention. No binding contract ever came [149 P.2d 189]; Lawrence Block Co. v. into existence. Palston, 123 Cal.App.2d 300 [266 P.2d 856].) "Where a person offers to do a The judgment is affirmed. definite thing and another introduces a new term into the acceptance, his answer is a mere expression of willingness to negotiate or is a counter proposal, and in neither case is there a contract; if it is a new proposal and it is not accepted it amounts to nothing (citations)." (American Aeronautics [*727] Corp. v. Grand Central Aircraft Co., 155 Cal.App.2d 69, 80 [317 P.2d 694].) To argue that the word "proviso" used by plaintiff in his alleged acceptance refers only to a "suggestion for better terms" and not to a new and different proposal varying with, and completely modifying, the terms of the original alleged offer is to ignore any reasonable construction of the latter writing. Nowhere mentioned therein was any proposal to manufacture or produce the machine - only a plan to merchandise and market it through an exclusive sales promotion. Obviously production by defendants was not contemplated. Plaintiff's alleged acceptance contains the first mention that defendants are "to put this product in production, " introducing a completely new proposal for their consideration. It is one thing to merchandise and market an item, quite another to assume the burden of producing it --GREEN CIVIL CODE DIVISION 3. Obligations PART 2. Contracts TITLE 2. Manner of Creating Contracts $ 1624. Statute of frauds; Qualified financial contracts; Personal property leases The following contracts are invalid, unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by the party's agent: (1) An agreement that by its terms is not to be performed within a year from the making thereof. (2) A special promise to answer for the debt, default, or miscarriage of another, except in the cases provided for in Section 2794. (3) An agreement for the leasing for a longer period than one year, or for the sale of real property, or of an interest therein; such an agreement, if made by an agent of the party sought to be charged, is invalid, unless the authority of the agent is in writing, subscribed by the party sought to be charged. (4) An agreement authorizing or employing an agent, broker, or any other person to purchase or sell real estate, or to lease real estate for a longer period than one year, or to procure, introduce, or find a purchaser or seller of real estate or a lessee or lessor of real estate where the lease is for a longer period than one year, for compensation or a commission.CARSON'S INN INCOME STATEMENT For the years ended December 31, 2004 2003 2002 Rental Revenue Other Revenues (note 1) $892,513 $796,500 $759,656 Total Revenues 212,432 183,195 171,923 $1,104,945 $979,695 $931,579 Cost of Revenue (note 2) 441,978 411,472 419,211 Gross Profit $662,967 $568,223 $512,368 Marketing 110,495 97,970 93,158 General and Administrative (note 3) 287,286 254,721 242,211 Operating Income $265,187 $215,533 $177,000 Notes to Income Statement Note 1: Other Revenues Other revenues consist of charges to guests for charges for other goods and services. Note 2: Cost of Revenue Cost of revenue includes all payroll related costs of employees; depreciation on the property, improvements, and furniture; linen service charges; utilities; and bed taxes. Depreciation in cost of revenue 2004 2003 2002 Building (40 year life, Straight line) $50,000 $50,000 $50,000 Property Improvements (various) 72,000 68,500 65,000 Furniture (5 year life, Straight line) 88,000 82,000 82,000 Note 3; General and Administrative Expenses General and administrative expenses do not include a salary for S. Rivera, the owner of the hotel, since this is a sole proprietorship and not a corporation. Ms. Rivera took drawings of $75,000 in 2004; $72,000 in 2003; and $70,000 in 2002 in addition to the expenses listed above. These amounts approximate what a manager would be paid. General and administrative expenses also include depreciation on equipment of $22,000 in 2004; $23,000 in 2003, and $27,000 in 2002