Property (897-2)

Professor BRATT

MODEL EXAM ANSWER #2

In X's suit against CPS, X will seek recovery under a bailment theory. The critical question in this lawsuit, as in many lawsuits, will turn on the allocation of the burden of proof. If a party to a lawsuit fails to meet its burden of proof, the party loses. Initially, X (the purported bailor) must establish that a bailment of the car existed; that she made a rightful demand for redelivery af the car; and, that the bailed item was not returned or returned in a damaged condition. It appears highly probable that X can meet her burden of proof. A bailment can exist only as to personalty and a car certainly qualifies as personalty. In order to show that a bailment existed as to the car, X must establish that she intended to relinquish to CPS the right of possession (as opposed to mere custody) of the car; that CPS had physical control of the car; and that CPS intended to exercise that control. This can be established because CPS both parked the car and retained the car keys (CPS' control and intent) and X relinquished the keys and accepted a claim check (X's intent to relinquish the right of possession). Further, there does not appear to be any dispute that X rightfully demanded redelivery of the car and that CPS failed to redeliver it to her.

This is a commercial bailment. Therefore, in most jurisdictions (and under the Uniform Commercial Code and the Uniform Warehouse Receipts Act), it would now be up to CPS, as bailee, to prove its freedom from negligence. This represents a fair burden to place on a commercial bailee because it is in the best position to know what happened to the car; it is better able to bear the financial impact of an unexplained loss; and the financial impact of an unexplained loss should be treated as a normal expense of the business of being a commercial bailee.

CPS would have to show that it had not breached its duty of care as a commercial bailee. That duty is one of reasonable care under the circumstances because the bailment is for the mutual benefit of the bailor (a place to park the car) and the bailee (a fee). This reasonable care position is actually the middle position in the common law's tripartite scheme on the standard of care. Thus CPS is held to neither the highest level of care nor the lowest, but rather, somewhere in between. X will win her lawsuit because CPS can not explain the loss therefore it can not negate its negligence (note that CPS can not admit misdelivery as it is then strictly liable without any negligence unless this is a minority jurisdiction which does not impose strict liability for misdelivery over an indispensable instrument -- a claim check).

Even if we assume CPS attempted to reduce its duty of care and/ or limit its dollar amount of liability via printing on the claim check, X will probably win her lawsuit for the full value of her car. The courts will not allow CPS to totally exonerate itself from all liability for negligence. CPS can only reduce its duty of care to liability for gross negligence. CPS can not explain the loss therefore it can not negate even this lessened duty of care. Furthermore, courts do not favor attempts to reduce the bailee's duty of care or attempts to limit the dollar amount of its liability. Absent a strong showing that X knew of the disclaimer of liability and/or the dollar limitation of liability and accepted it, the attempt has no legal effect.