Facts: Tepko was involved in a proposal to rezone and subdivide dairy farmland for residential development. To progress the development, Tepko needed to reach an agreement with the Water Board to connect land to the Water Board's water supply system. While Tepko was in negotiations with the Water Board, the bank indicated it was going to foreclose on securities supporting the loan financing the development. To make a determination regarding the foreclosure, the bank requested that Tepko obtain an estimate of cost of water connections from the Water Board. It was not the normal practice of the Water Board to give cost estimates but it ‘caved in’ and provided ball park figures at the high end of the range. The bank’s interest in the estimate was not disclosed to the Water Board. The bank foreclosed on securities supporting the loan on the basis of these figures which were not accurate.
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