Business & Law of Torts- Chapter 6 - University of Texas at...

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ELEMENTS OF TORTS

Chapter 6

Meiners, Ringleb & EdwardsThe Legal Environment of Business, 12th Edition


TORTS AND THE LEGAL SYSTEM

Definition The word tort derived from Latin tortus or “twisted”. Means “wrong” in

French

Civil wrong, other than a breach of contract, for which the law provides a remedy

Breach of a duty owed to another that causes harm

Arises from careless errors or intentional actions Law reflects social values and community standards Lawsuits involving businesses often have large awards, i.e.

Pennzoil-Texaco case: Jury awarded $10.5 billion to the plaintiff. Has become a major issue for businesses Breach of a legal duty owed to another that causes harm


BUSINESS AND TORTS Categories

Negligence Intentional Strict Liability

Business becomes involved through (1) person is harmed by actions of business or its employees (2) a person is harmed by a product manufactured or distributed

by the business (3)a business is harmed by the wrongful actions of another

business or person Some torts are generally unique to businesses (Chapter 7) Torts can be specific to property (Chapter 8)


ROLE OF TORT LAW

Compensation for injuries wrongfully inflicted by the defendant on the plaintiff

Civil not criminal law Law is determined in each state – rules vary.

However, the basic principles are similar among all states.

Remedies should place injured party in the position he/she would have been in prior to the tort.

Fear of tort action deters injurious behavior by others. Punitive damages punish malicious or extremely

reckless behavior.


NEGLIGENCE-BASED TORTS Unintentional careless conduct that creates an unreasonable risk

of harm to others Elements

(1) Breach of duty of care wrongdoer owed to injured party Owed to the plaintiff Breach through an act or omission

(2) Causation (causal connection to the injury) (3) Injury/Damages

There can be a negligence action even if there was no intent to do harm

Gross Negligence: Conscious & voluntary disregard for need to use reasonable care More likely to lead to punitive damages


INTERNATIONAL PERSPECTIVE“NO LITIGATION JACKPOTS IN NEW

ZEALAND” New Zealand has common-law system But has abandoned tort suits for damages in personal

injuries. Is replaced by Accident Compensation Corporation

that pays people injured in accidents by a schedule of fixed payments.

No mega awards like the U.S.


DUTY OF CARE Reasonable Person Standard: The standard is how

persons in the relative community ought to behave One must be reasonable at all times, under all

circumstances Not liable for everything – only “unreasonable” acts Standard: “What a reasonable person would do in same

or similar circumstances” Applies to professions – reasonable CPA, MD, attorney,

etc. Standard: what a reasonably skilled, competent and experience

person in that profession would do

See Squish La Fish v. Thomco


CASESQUISH LA FISH V. THOMCO SPECIALTY PRODUCTS

Squish holds patent on “Tuna Squeeze” (squeezes water or oil from tuna cans); ProPack was hired to assist with store displays.

ProPack brought in Thomco for advice on adhesive for the displays. Thomco said the adhesive would wash off; Squish relied on the advice,

but adhesive wouldn’t wash off. A Squish distributor was not happy with the situation; cancelled its

contract so huge business loss to the small company. Squish sued Thomco for negligent misrepresentation. District Court granted summary judgment for Thomco; Squish appealed. Held: Reversed and remanded Disputed issues to go before the trial court There may have been reliance by Squish through ProPack on Thomco’s

representations.


Causation between a party’s act & another’s injury. Cause in fact shows the person’s conduct is the actual cause of the

event that created the injury (some courts call this the “but for” test [sine qua non rule]).

Proximate cause indicates that the liability bears a reasonable relationship to the negligent conduct.

In some cases, case is so obvious, res ipsa loquitur (“the thing speaks for itself”) applies.

If consequences are too remote – no liability. If there is an intervening or superseding event/conduct – no liability. Chain of events created by a party’s actions must be foreseeable. Some states replace proximate cause with substantial factor test in

bringing about the injury. Danger-Invites-Rescue Doctrine

Negligent party responsible for losses suffered by those who attempt to save people who are in danger as the result of torts of others.

CAUSATION


CASEPALSGRAF V. LONG ISLAND RR CO.

Palsgraf waits on the platform for a train; another train begins to leave the station; man carrying a package runs to catch it; jumps on the train; looks like he might fall.

Guards try to help him as he teeters. He drops the package which contains fireworks that explode. Shock from the explosion causes scales located on the platform to

fall, injuring Palsgraf who sues RR for negligence of its employees. Jury finds for Palsgraf; appellate court affirms; RR appeals. Issue: Is it foreseeable that the assistance by the guards would

cause Palsgraf’s injury through the falling scales? Held: No. Nothing in the situation would suggest such a result. A

bizarre situation that cannot be expected. Case reversed and dismissed.


EVOLVING CHANGES IN THE LAW OF NEGLIGENCE

Thompson v. Kaczinski (2009 Iowa Supreme Court case) Adopted some portions of Restatement (Third) of Torts Need not focus on ordinary duty of reasonable care – this duty is

presumed where there is risk of physical harm. Instead, court should “proceed directly to the elements of liability”. Less reliance on proximate case – “has been a source of significant

uncertainty & confusion”. Move also away from “substantial factor”. INSTEAD, Restatement Third refers to the “scope of liability” related to

risks present in a specific situation. Court will use a “risk standard” to judge when liability is imposed.

Changes are subtle; will take years to become apparent in the working of tort law in the U.S.


DEFENSES TO A NEGLIGENCE ACTION

Assumption of Risk The injured party knew or

should have known of the risk and voluntarily assumed it. Complete bar to the plaintiff’s

case

May be based on liability waiver or exculpatory clause in a contract

See Geczi v. Lifetime Fitness See Issue Spotter: “Effective

Liability Releases”

Comparative Negligence Damages are reduced by the % of

injuries caused by the plaintiff’s own negligence Replaced old rule old rule of

contributory negligence

Term contributory negligence still used, but for damages, the rule of comparative negligence is employed

See Exhibit 6.2


CASEGECZI V. LIFETIME FITNESS

Jodi Geczi was member of Lifetime Fitness in Columbus, Ohio. Was using a treadmill that began to jerk violently; tried to steady

herself but was pulled sideways and suffered an arm injury Lifetime employees told her they knew the machine was broken, but

no sign had been placed on it. Geczi sued Lifetime for negligence and gross negligence.

Claimed she suffered lost income, pain and medical expenses Lifetime defended that as part of the membership agreement, Geczi

agreed to an exculpatory clause that could bar he claim She admitted she knew of the contract clause of no negligence for

Lifetime from using equipment. Claimed that Lifetime was liable for willful and wanton behavior for

failure to warn of danger posed by the malfunctioning machine. Jury held for lifetime. She appealed.

(Continued)


Issue: Whether reasonable minds can only conclude that documents Geczi signed constituted a valid release of claims against Lifetime.

Previously courts recognize that law does not favor release from liability for future tortious conduct. Releases are narrowly construed.

However, clear & unambiguous contract clauses relieving a party from liability for its own negligence are generally upheld in Ohio.

Provision in member Policy: “I accept full responsibility for my use, as well as the use by any other person under my membership, of any and all equipment . . . . I agree that I will hold the Club . . . harmless from any and all loss, claim, injury, damage, or liability incurred by me. . . . I fully understand all of the Club’s policies and agree to abide by them.”

Release did not distinguish between types of negligence but extended to ANY injury resulting from Lifetime’s negligence.

Language in document extends to negligence in maintaining equipment, leaving defective equipment available to users, and failing to warn of defects.

Jury looked at question if Lifetime’s failure to act or warn was “willful or wanton conduct” – found Lifetime was not.

HELD: Judgment Affirmed.

CASEGECZI V. LIFETIME FITNESS


INTENTIONAL TORTS AGAINST PERSONS

Establishing Intent Person knew what he/she was doing Intent to do the act which reasonably would result in harm to

the plaintiff Knew /should have known the possible consequences of an

action Willful misconduct

See Issue Spotter “Dealing with Drunks”


Assault Battery False Imprisonment or False Arrest Infliction of Emotional or Mental Distress Invasion of Privacy Defamation: Libel and Slander See Exhibit 6.3

INTENTIONAL TORTS AGAINST PERSONS


Placing plaintiff in fear of immediate bodily injury Intent to act to cause a harmful or offensive contact Plaintiff has imminent apprehension or fear Fear: if a reasonable person under the same or similar

circumstances would have apprehension of bodily harm or offensive contact

Examples: Threats? Usually an assault Pointing a gun? Yes Point a gun while other person sleeps? No assault Letter threats? Usually, no assault (“immediate” requirement usually not

met) Phone threats? Maybe. How close is the caller? On a cell phone

outside the door or window?

ASSAULT


Unlawful “touching” Intentional physical contact without consent Even if no actual physical harm, offense to a “reasonable

person’s sense of dignity” may constitute a battery Use of fist, hand, or kicking Use of weapons, i.e. guns or stick Unwanted kiss? Has been held in some states to

constitute battery Assault & Battery often linked together in a lawsuit

BATTERY


Consent Privilege Self defense Defense of others/Defense of property

• Most states have “stand your ground” doctrines

• No requirement to retreat

• Allow force for force & deadly force for deadly force See Fuerschbach v. Southwest Airlines Company See Exhibit 6.3

DEFENSES


CASEFUERSCHBACH V. SOUTHWEST AIRLINES

Fuerschbach worked as customer service representative for Southwest Airlines at Albuquerque airport.

Airline prides itself on being “fun-loving, spirited company”. After new employees finish probationary period, they are often

subject to a prank to celebrate the event. Her supervisor thought would be fun to set up a mock arrest. Two Albuquerque police officers came to the counter, told her of

outstanding warrants against her, handcuffed her and told her she was under arrest.

She began to cry, so officers took her to the party in the back. All the employees yelled “Congratulations for being off probation!” Handcuffs removed; little party began. She kept crying and was sent

home. Saw a psychologist who said she suffered post-traumatic stress

disorder.(Continued)


Fuerschbach sued everyone connected with the event on numerous grounds, including assault and battery.

District court granted summary judgment for defendants and did not allow the matter to go to trial.

HELD: Reversed. Summary judgment vacated re: assault and battery claim. She can go to trial. Issue: Did the actions offend “a reasonable sense of personal dignity”?

HELD: Jury might be able to conclude that being handcuffed and leading the person to walk fifteen feet offends a “reasonable sense of personal dignity.”

Police handcuffed her – offensive contact. Note: Some other claims allowed to go forward; others were denied.

The only claim against Southwest Airlines was a Workers’ Compensation claim because there was no intent by anyone to harm her at work.

CASEFUERSCHBACH V. SOUTHWEST AIRLINES


FALSE IMPRISONMENT

Intentional holding, detaining or confinement

Freedom to come and go is restrained

Restraint or Confinement May be physical May be mental (i.e.

through verbal threats) Lawsuits often arise from

detention of suspected shoplifters

Defense by businesses regarding detention of shoplifters Restraint was in a

reasonable manner Restraint was in a

reasonable time Basis for the detention was

valid See Forgie-Buccioni v. Hannaford

Brothers


CASEFORGIE-BUCCIONI V. HANNAFORD BROTHERS

Forgie-Buccioni went into grocery store, paid for various items and left Realized he had bought wrong kind of Drixoral (cold med.) Left other items in his car and went back into store. He told a clerk he

was going to exchange Drixoral and left the box he had paid for on the counter

Buccioni found box he wanted and picked up other items to buy Told different clerk that he had already paid for Drixoral and then paid

for other items Left store, but manager, Frender, went to parking lot and ask him to

come back to the store Said he had not paid for Drixoral Frender put Buccioni in store’s security room to discuss matter and

called police Officer arrested Buccioni. Charges later dropped.

(Continued)


He sued for false imprisonment. Jury awarded $100,000. Hannaford Brothers appealed. HELD: Affirmed. Jury’s award was not grossly excessive. Under New Hampshire law, false imprisonment:

(1) Defendant acted with the intent to restrain or confine (2) Defendant’s acts resulted in restraint/confinement (3) Plaintiff was conscious of and harmed by

restraint/confinement Jury could conclude that Buccioni was falsely imprisoned. Frender “kept pushing” Buccioni toward security room. Was not “free to leave.” A store employee sat with him. 30-45 minutes until officer arrived for arrest.

CASEFORGIE-BUCCIONI V. HANNAFORD BROTHERS


INFLICTION OF EMOTIONAL DISTRESS /MENTAL DISTRESS

Intentional conduct: So outrageous, it creates severe mental or emotional distress

Petty insults, annoying behavior, bad language? Usually not actionable; we must have “tough skin.”

Bill collectors or landlords who badger, are profane, or threaten lay the background for a lawsuit.

Ex: Louisiana court gave an award to a woman who found her comatose husband being chewed by rats in a hospital

See Lawler v. Montblanc See Issue Spotter “Dealing With the Elderly and their Heirs”


CASELAWLER V. MONTBLANC

Montblanc makes high-end writing implements & other luxury products. Sells wholesale and at boutique retail stores. Cynthia Lawler was retail store manager in California for 8 years. She was

expected to work full time. In 8th year, Lawler developed medical conditions – doctor said she could only

work 20 hours/week. She informed Montblanc of this. Was told as a manger she had to work at least 40 hours /week. President of company visited and was critical of way store was run. Lawler testified he (Schmitz) was “unpleasant”. Again she told the company her doctor said she should not work full time. Company said that was part of her position; offered her severance pay. She refused; sued for disability discrimination and intentional infliction of

emotional distress. District Court held for Montblanc.

(Continued)


(Appeals court affirmed that Lawler had no claim for disability.) California’s cause of action for intentional infliction of emotional distress:

(1) extreme and outrageous conduct by defendant with intention of causing or probability of causing emotional distress; (2) plaintiff suffered severe or extreme emotional distress; (3) actual and proximate cause of emotional distress was by defendant’s outrageous conduct

”Outrageous”: When so extreme it exceeds all bounds usually tolerated in a civilized community. Does not extend to mere insults, indignities, threats, annoyances, or other trivialities

Schmitz’s “gruff”, “abrupt,” and “intimidating” conduct cannot be characterized as “exceeding all bounds of that tolerated civilized community.”

Criticism he made related to store’s business operations & Lawler’s performance. He was inconsiderate and insensitive in communicating his dissatisfaction. However, the alleged emotional distress is not “severe”

She said injuries manifested as “anxiety, sleeplessness, upset stomach & muscle twitches – this does not rise to “severe” level.

HELD: Affirmed District courts’ summary judgment for defendants.

CASELAWLER V. MONTBLANC


INVASION OF PRIVACY Infringement on a person’s right of solitude & freedom from

unwarranted public exposure Use of a person’s name or picture without permission Intrusion on solitude (i.e. wiretap) Placing a person in false light (publishing a false story) Public exposure of private facts (debts, drug use) Defenses

Right of privacy waived by public figures, politicians, entertainers, sports personalities, etc.

Information about an individual taken from public files or records

See James v. Bob Ross Buick


CASEJAMES V. BOB ROSS BUICK, INC.

James worked at Mercedes dealership owned by Bob Ross Buick. In 2002, he was sales rep. of the year. In 2003 no sales reps. met established quotas. In 2004 he was fired.

After firing, Buick company sent batches of letters to customers who had worked with James. Letters encouraged them to shop for Mercedes.

Letter addressed as if they were from James. Administrative assistant at Bob Ross signed James’s name to the letters.

James sued for misappropriation of his name, a form of invasion of privacy.

Trial Court: Summary judgment for Bob Ross. James appealed. (Continued)


Forgery of signature is a variant of tort generally known as invasion of privacy. Mere incidental use of a person’s name or likeness is not actionable. One cannot object to mere mention of name before the public.

Appropriation occurs when there is commercial benefit of value from the use of the name or likeness.

HELD: Reversed and remanded. This is not mere incidental use of James’s name. Batches of letters sent out to former clients of James. This had

commercial value – letters used to induce future sales for the car company.

Money that Bob Ross received as a result of appropriating James’s name can be a part of the actual damages to him.

James may seek nominal, compensatory, and punitive damages, if appropriate.

CASEJAMES V. BOB ROSS BUICK, INC.


DEFAMATION Definition: An intentional false communication that

injures a person’s or company’s reputation or good name

Slander: spoken defamation Libel: written or television broadcast defamation Elements of the Tort:

False or defamatory statement Published or communicated to a third person Causing harm or injury to the plaintiff If person who has false statement said TO THEM, then tells a

3rd party: “Self publication” and no tort.


Defamation per se: Presumption of harm No proof of harm/injury is necessary Examples: person has committed a crime; has a sexually

communicable disease; carries out business activities improperly; use of highly derogatory, descriptive language, name-calling, etc.

Workplace Defamation: Info. given re: job performance or info. spread within business unnecessarily about an employee

See Issue Spotter “Say Good Things About A Good Employee?” See Chambers v. Travelers

DEFAMATION


CYBER LAW“TORT LIABILITY FOR INTERNET

SERVERS” Q: If Internet users are involved in illegal activities, are

the Internet servers liable?• A: Generally no, as long as they were not aware of it nor had

reason to be aware of it.

In Zeran v. America Online: AOL not liable in tort for defamatory message that AOL user sent. Sender is liable.

Doe v. Cahill: When defamatory statements are posted, victim of the statements has a right to obtain the identity of the party who sent the material (here Doe, is the anonymous defendant).


DEFENSES TO DEFAMATION Truth is a complete defense in some states Absolute privilege is an immunity

Legislators in committee sessionsParticipants in judicial proceedings

Conditional privilege eliminates liability if the false statement was published in good faith. If there is no malice In order to protect a person’s legitimate interests

Constitutional privilegeMembers of the press may publish “opinion” about

public officials, figures, or those of public interest if there is no actual malice (“absence of malice”)


CASECHAMBERS V. TRAVELERS

Karen Chambers worked for Travelers from 1987-2008. Supervised employees who began to file complaints about her. Human Resources Manager, Cady, investigated complaints as did

Chambers’ superior, Werner. Results were not good. Chambers was warned about her behavior.

Was given specific management issues to address. She was not in agreement.

2 months later, her superior asked her if it was true she took her daughter with her on a business trip. Admitted she did but did not volunteer that her grandson came

along, too. When facts came to light, she was fired. Chambers sued for defamation. District Court held for Travelers. She appealed..

(Continued)


Defamation under Minnesota laws requires defamatory statement (1) was communicated to someone other than plaintiff (2) was false (3) tended to harm plaintiff’s reputation/lower in the estimation of the community

Defendant may be entitled to “qualified privilege” that defeats the claim If statement was “made upon proper occasion, for proper motive & based

upon reasonable or probable cause” Complaints gave Travelers reasonable grounds to investigate. Cady surveyed

staff; reported concerns expressed about Chambers’ performance to Werner who then summarized negative comments to Chambers--sought her response

Communications between an employer’s agents made during investigation or punishing employee misconduct are made for proper purpose

Employer has an interest in protecting itself and public against dishonest or harmful employees

Qualified privilege is not abused if no malice. Here – no actual malice or ill will HELD: Affirmed Travelers was entitled to the qualified privilege as a matter of law. Statements by Travelers agents were entitled to a “qualified privilege”.

CASECHAMBERS V. TRAVELERS

Business & Law of Torts- Chapter 6 - University of Texas at...

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