14 - Insurance Law, Part I

4 possible major classes of immunities available as defenses from liability for torts

- Sovereign, or governmental, immunity - Public official immunity - Charitable immunity - Intrafamilial immunity

Bad faith (outrage)

A breach of the duty of good faith and fair dealing.

Proximate cause

A cause that, in a natural and continuous sequence unbroken by any new and independent cause, produces an event and without which the event would not have happened.

Contributory negligence

A common-law principle that prevents a person who has been harmed from recovering damages if that person's own negligence contributed in any way to the harm.

Comparative negligence

A common-law principle that requires both parties to a loss to share the financial burden of the bodily injury or property damage according to their respective degrees of fault.

Pure comparative negligence rule

A comparative negligence rule that permits a plaintiff to recover damages discounted by his or her own percentage of negligence, as long as the plaintiff is not 100 percent at fault.

49 percent comparative negligence rule

A comparative negligence rule that permits a plaintiff to recover reduced damages so long as the plaintiff's negligence is less than the other party's negligence.

50 percent comparative negligence rule

A comparative negligence rule that permits a plaintiff to recover reduced damages so long as the plaintiff's negligence is not greater than 50 percent of the total negligence leading to harm.

Exculpatory clause (exculpatory agreement)

A contractual provision purporting to excuse a party from liability resulting from negligence or an otherwise wrongful act.

Immunity

A defense that, in certain instances, shields organizations or persons from liability.

Interspousal immunity

A defense to negligence that grants immunity to one spouse from the other spouse's lawsuit for torts committed before, during, and after the marriage.

Parent-child immunity

A defense to negligence that grants immunity to parents from their children's lawsuits for torts.

Sovereign immunity (governmental immunity)

A defense to negligence that protects the government against lawsuits for tort without its consent.

Attractive Nusiance Doctrine

A doctrine treating a child as a licensee, or guest, rather than a trespasser on land containing an artificial and harmful condition that is certain to attract children.

Defamation

A false written or oral statement that harms another's reputation.

Injurious falsehood

A group of torts involving disparagement that causes harm to any kind of legally protected intangible property right. Similar to defamation, but plaintiff must prove both the falsity of the statement and the actual damage or loss, while defamation might not result in actual damages.

Product disparagement, or trade libel

An intentional false and misleading statement about a characteristic of a plaintiff's product, resulting in financial damage to the plaintiff.

Battery

Intentional harmful or offensive physical contact with another person without legal justification. To be classified as a tort, an act must be intentional and hostile or offensive. Defenses: - The plaintiff consented to the act - The act was in self-defense or in defense of others - The act was one of physical discipline

Exclusive control

The control of only one person or entity; in tort law the control by the defendant alone of an instrument that caused harm.

Trespass

Unauthorized entry to another person's real property or forcible interference with another person's personal property.

4 rules to determine proximate cause

- "But for" rule - Substantial factor rule - Proof of defendant's responsibility - Foreseeability rule

6 elements required for proof of fraud

- A false representation has been made. - The misrepresentation is material (important) and concerns a past or an existing fact. - The misrepresentation was knowingly made--that is, made with the knowledge of its falsity, in reckless disregard of the truth or without knowledge or concern as to whether it was true or false. - The misrepresentation was made with intent to influence or deceive. - The party to which the misrepresentation was made places reasonable reliance on its truth. - The complaining party must suffer a detriment, or actual damage.

13 common types of intentional torts

- Battery - Assault - False imprisonment and false arrest - Intentional infliction of emotional distress - Defamation (libel and slander) - Invasion of the right of privacy - Fraud - Bad faith, or outrage - Interference with relationships between others - Misuse of legal process - Trespass - Nuisance - Conversion

5 defenses against a plaintiff's negligence action

- Comparative negligence - Releases and exculpatory clauses - Immunity - Statutes of limitations and repose - Tortfeasor's capacity

7 torts included under "Interference with relationships between others"

- Injurious falsehood - Malicious interference with prospective economic advantage - Unfair competition - Interference with employment - Interference with copyright, patent, or trademark - Interference with right to use one's own name in business - Interference with family relationships

Classifications of tort

- Intentional torts: defamation, invasion of privacy, trespass, interference with contractual rights, fraudulent misrepresentation. - Unintentional torts: negligence - Physical torts: battery, assault, false imprisonment, false arrest - Nonphysical torts: defamation (libel and slander), malicious prosecution, fraud

5 defenses to Bad Faith, or outrage

- No intent or recklessness was involved. - No outrageous or extreme conduct occurred. - The defendant did not breach any implied duty of good faith and fair dealings. - If contract damages are involved, the defendant owed no contractual duty to the plaintiff. - In an insurance case, no valid insurance contract existed; therefore, the defendant owed the plaintiff no duty to act fairly and in good faith.

4 essential elements of negligence

- The defendant owed a legal duty of care to the plaintiff. - The defendant breached the duty of care owed to the plaintiff. - The defendant's negligent act was the proximate cause of the plaintiff's injury or damage. - The plaintiff suffered actual injury or damage.

6 defenses to fraud

- The statement was not false. - The statement did not relate to a material fact. - The defendant did not know the statement was false. - The defendant did not intend to deceive. - The plaintiff did not rely on the statement. - The plaintiff suffered no harm or loss because of relying on the statement.

Slander

A defamatory statement expressed in speech.

Libel

A defamatory statement expressed in writing.

Wrongful-pregnancy action (wrongful-conception action)

A lawsuit by a parent for damages resulting from a pregnancy following a failed sterilization.

Wrongful-life action

A lawsuit by or on behalf of a child with birth defects, alleging that, but for the doctor-defendant's negligent advice, the parents would not have conceived the child or would have terminated the pregnancy so as to avoid the pain and suffering resulting from the child's defects.

Concurrent causation (concurrent causation doctrine)

A legal doctrine stating that if a loss can be attributed to two or more independent concurrent causes--one or more excluded by the policy and one covered--then the policy covers the loss.

Res ipsa loquitur

A legal doctrine that provides that, in some circumstances, negligence is inferred simply by an accident occurring. Permits an inference of negligence if the action or event causing injury was under the defendant's exclusive control, and the accident ordinarily would not have happened if the defendant had exercised appropriate care. Courts frequently apply res ipsa loquitur in lawsuits by passengers against common carriers.

Release

A legally binding contract between the parties to a dispute that embodies their agreement, obligates each to fulfill the agreement, and releases both parties from further obligation to one another that relates to the dispute.

Proprietary function

A local government's act that is not considered part of the business of government and that could be performed by a private enterprise.

Jurisdiction

A particular court's power or authority to decide a lawsuit of a certain type or within a certain territory.

Standing to sue

A party's right to sue, as one who has suffered or will suffer a legal wrong or an adverse effect from an action.

Public invitee

A person invited to enter onto premises as a member of the general public for a purpose for which the land is open to the public.

Tortfeasor

A person or an organization that has committed a tort.

Licensee

A person who has permission to enter onto another's property for his or her own purposes.

Trespasser

A person who intentionally enters onto the property of another without permission or any legal right to do so

Liquidated damages

A reasonable estimation of actual damages, agreed to by contracting parties and included in the contract, to be paid in the event of a breach or for negligence.

Slight versus gross rule

A rule of comparative negligence that permits the plaintiff to recover only when the plaintiff's negligence is slight in comparison with the gross negligence of the other party.

Substantial factor rule

A rule used to determine proximate cause of a loss by determining which of the acts are significant factors in causing the harm.

Foreseeability rule

A rule used to determine proximate cause when a plaintiff's harm is the natural and probable consequence of the defendant's wrongful act and when an ordinarily reasonable person would have foreseen the harm.

"But for" rule

A rule used to determine whether a defendant's act was the proximate cause of a plaintiff's harm based on the determination that the plaintiff's harm could not have occurred but for the defendant's act

Reasonable person test

A standard for the degree of care exercised in a situation that is measured by what a reasonably cautious person would or would not do under similar circumstances.

Statute of repose

A statute that requires a plaintiff to file a lawsuit within a specific time period after a wrongful act by a defendant, such as improper construction of a building, regardless of when the injury occurred or was discovered.

Statute of limitations

A statute that requires a plaintiff to file a lawsuit within a specific time period after the cause of action has accrued, which is often when the injury occurred or was discovered.

Intentional tort

A tort committed by a person who foresees (or should be able to foresee) that his or her act will harm another person.

Malicious interference with prospective economic advantage

A tort involving intentional interference with another's business, or with another's expected economic advantage.

Tort

A wrongful act or an omission, other than a crime or a breach of contract, that invades a legally protected right.

Common carriers

Airlines, railroads, or trucking companies that furnish transportation to any member of the public seeking their offered services.

Gross negligence

An act or omission that completely disregards the safety or rights of others and is exaggerated or aggravated in nature.

Governmental function

An act that can be performed only by government.

Negligence per se

An act that is considered inherently negligent because of a violation of a law or an ordinance.

Ministerial act

An act that is directed by law or other authority and that requires no individual judgment or discretion about whether or how to perform it.

Administrative act (discretionary act)

An act, a decision, a recommendation, or an omission made by a government official or agency within the authority of that office or agency.

Intervening act

An act, independent of an original act and not readily foreseeable, that breaks the chain of causation and sets a new chain of events in motion that causes harm.

Public nuisance

An act, occupation, or structure that affects the public at large or a substantial segment of the public, interfering with public enjoyment or rights regarding property.

Ultrahazardous activity (abnormally dangerous activity)

An activity that is inherently dangerous; if harm results, the performer may be held strictly liable.

Invasion of privacy

An encroachment on another person's right to be left alone.

Business invitee

An individual who has express or implied permission to be on the premises of another for the purpose of doing business.

Intentional infliction of emotional distress

An intentional act causing mental anguish that results in physical injury.

Fraud

An intentional misrepresentation of the facts to deceive or mislead another.

Legal duty

An obligation imposed by law for the preservation of the legally protected rights of others.

Artificial Conditions

An owner who alters land in any manner can be liable either for negligence or for creating a nuisance because of those alterations. - Concentrating the flow of water discharges on adjoining land - Permitting artificial devices, such as downspouts, to discharge over public ways - Creating any other artificial condition that discharges water or snow on adjoining premises or roads Must alert trespassers of hazards. Attractive nuisance doctrine.

Interference with employment

An unjustified intentional act that interferes with another's valid or expected business relationship.

Private nusiance

An unreasonable and unlawful interference with another's use or enjoyment of his or her real property.

Nuisance

Anything interfering with another person's use or enjoyment of property.

Nusiance

Anything interfering with another person's use or enjoyment of property.

Application of Laws in Tort Cases

Court must decide which jurisdictions' laws applies to the case. Plaintiff may have standing to sue for tort in more than one jurisdiction. Lex fori = law of the forum jurisdiction, the place where the party sues Lex loci = law of the jurisdiction where the wrong occurred General rule in tort actions is that the lex loci governs any substantive matters relating to the lawsuit. Lexi fori governs procedure, such as application of evidentiary rules. Some courts use significant contacts rule instead to determine which law applies.

Natural Conditions

In general, a landowner is not liable for natural conditions on the land that cause injury either on or off the land. Reasonableness is applied to situations where they might be held liable. Rural landowners not liable for trees, urban landowners may be.

Publication

In tort law, the communication of a defamatory statement to another person.

Common law (case law)

Laws that develop out of court decisions in particular cases and establish precedents for future cases.

Strict liability (absolute liability)

Liability imposed by a court or by a statute in the absence of fault when harm results from activities or conditions that are extremely dangerous, unnatural, ultrahazardous, extraordinary, abnormal, or inappropriate.

Misuse of Legal Process

Malicious Prosecution and Malicious Abuse of Process

Invitee

Person who enters a premises for the financial benefit of the owner or occupant.

Intentional nusiance

Purposeful interference with another party's enjoyment of his or her property.

Significant contacts rule

Specifies that the substantive law of a state having more significant contacts to the parties could apply, even when the tort occurred elsewhere.

Real property (realty)

Tangible property consisting of land, all structures permanently attached to the land, and whatever is growing on the land.

Chattel

Tangible, movable personal property.

Negligence

The failure to exercise the degree of care that a reasonable person in a similar situation would exercise to avoid harming others.

Probable cause

The grounds that would lead a reasonable person to believe that the plaintiff committed the act for which the defendant is suing.

Malicious prosecution

The improper institution of legal proceedings against another.

Malice

The intent to do a wrongful act without justification or excuse.

Express license

The oral or written permission to enter onto another's land to do a certain act, but not the granting of any interest in the land itself.

Duties to those who enter the land or premises

The owner or occupier owes specific, but different, duties of care to licensees and invitees and a very minimal duty of care to trespassers. Landlords occupying land have legally determined responsibilities with regard to others on the premises.

Defendant

The party in a lawsuit against whom a complaint if filed.

Implied license

The permission to enter onto another's land arising out of a relationship between the party who enters the land and the owner.

Plaintiff

The person or entity who files a lawsuit and is named as a party.

False imprisonment

The restraint or confinement of a person without consent or legal authority.

False arrest

The seizure or forcible restraint of a person without legal authority.

Assault

The threat of force against another person that creates a well-founded fear of imminent harmful or offensive contact. In noncriminal law does not involve physical contact.

Conversion

The unlawful exercise of control over another person's personal property to the detriment of the owner.

Malicious abuse of process

The use of civil or criminal procedures for a purpose for which they were not designed.

Torts as distinguished from other offenses

Torts are civil, or private, wrongs. A person injured as a result of a tort may file a lawsuit against the accused wrongdoer, or tortfeasor (in contrast to government prosecutors bringing actions against the accused as in criminal trials; crimes are public wrongs). When a person's or an organization's actions or failure to act affect another adversely but do not constitute a crime or breach of contract, the victim may seek recourse under tort law.

Unfair competition

Use of wrongful or fraudulent practices by a business to gain an unfair advantage over competitors