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Course Text: Business Law: Principles for Today's Commercial Environment 4th Edition
by David P. Twomey
Abby is a 27-year-old teacher who wants to change careers and it has always been her desire to own a florist's shop. She goes to see Craig, her local banker, and they discuss the necessary business matters. Since Abby is relatively inexperienced, she depends on Craig to give her lots of advice--he talks to her about her business organization, capitalization, insurance, etc. This necessarily involves lots of time together and one thing leads to another, and they begin to date. Love has bloomed.
Meanwhile, plans for the business progress. Abby leases a very cute former gas station on a yearly basis. She borrows a total of $50,000 from Craig's bank and uses the money to set up inventory, secure insurance, etc. Throughout the process, she and Craig talk constantly about all aspects of the shop--he loves roses and wants her to traffic exclusively in that flower. Sometimes these meetings take place during the workday and some after 5 or on Saturdays at the shop. Craig is also present sometimes when she meets with vendors or potential clients.
Abby rents the gas station from the estate of Linda Heart. Linda had inherited the gas station from her father, who ran the gas station in the 1950's. The station had been closed since 1960, and Linda had forgotten about it. When Linda's obituary appeared in the local paper, Abby approached the estate about leasing the property and the deal was struck. The lease provides that Abby can rent the property with an option to buy for the year that the attorneys figure it will take to get the estate fully squared away. After that, Abby will have to buy the property or find a new site.
Abby's Floral Expressions opens in January 2005, and business is booming. A few problems arise, however--Abby has not made the appropriate arrangements for waste hauling, so for the first few weeks of business, she empties the dead flowers and the water used for the flowers out the back door. The water contains small amounts of commercial fertilizer. Also, since Abby has not really gotten her delivery bugs completely ironed out, she has fertilizer delivered by UPS three days a week in a package from Emma's Fertilizer.
Business is booming but love has faded. Shortly after the shop really gets going, Craig and Abby break up in a very acrimonious manner.
The worst is yet to come. Kathy, Abby's next door neighbor and a part-time environmental activist, is distraught that a commercial establishment has opened next to her. She has a condition that makes her hypersensitive to any chemicals and had moved to that quiet neighborhood to get away from any pollutants, etc. One day, she sees Abby dumping dead flowers and water they were in out her back door. She breaks out in hives and quickly calls the EPA and reports that Abby is dumping toxic waste. She also consults her lawyer to see if she has any rights personally.
Unlike many governmental agencies, the EPA is right on the spot within hours! In examining the backyard to see where the flower water was dumped, the inspector pokes down into the ground with a probe. Low and behold, he hears a hollow thump and when the EPA further investigates, they find that there was a gas tank under the building that had been improperly capped in the 50's, and that gas has been leaking into the ground for the last 40 years. Abby had no idea, nor did Linda's estate lawyers--after all this time, they have no records to indicate when or who capped the tank.
who is liable? And to whom?
