U.S. Torts (Winter 07)
Damages 6
Types of Damages 6
Elements of Compensatory Damages 6
Discount and Inflation Methods 6
General Versus Special Damages 6
Remittitur And Addititur 6
Legislative Tort Reform 7
Montgomery Ward v. Anderson 7
Expenses of Litigation 7
Structured Settlements 7
Zimmerman v. Ausland (Avoidable Consequences Rule) 8
Physical Harm to Property 8
Punitive Damages 8
Cheatham v. Pohle (Punitive Damages May Be Limited) 8
State Farm Mutual Automobile Insurance v. Campbell (Excessive Awards) 9
Damages Checklist 9
Joint Tortfeasors 12
Liability and Joinder of Defendants 12
Bierczynski v. Rogers (Need Not Do Harm To Be Liable) 12
When is Joint and Several Liability Imposed? 12
Contributory Negligence 12
Coney v. J.L.G. Industries (J&S Liability Ok With Comparative) 12
Bartlett v. New Mexico Welding Supply (J&S Not Ok With Comparative) 13
Satisfaction and Release 13
Bundt v. Embro (Once Plaintiff Compensated, Other Tortfeasors Discharged) 13
Cox v. Pearl Investment Company (Can Release Some Tortfeasors) 14
Joint Liability Checklist 14
Contribution 15
Yellow Cab Co. of D.C. v. Dreslin (No Joint Liability Where Spouses) 15
Slocum v. Donahue (Can Discharge Tortfeasors) 15
Apportionment of Damages 15
Bruckman v. Pena 16
Michie v. Great Lakes Steel Div., National Steel Corp. 16
Dillon v. Twin State Gas & Elec. Co. (Consider Value Of Person For Damages) 16
Defenses to Negligence 17
Plaintiff’s Conduct 17
Contributory Negligence 17
Butterfield v. Forrester (Plaintiff Must Have Clean Hands) 17
Davies v. Mann 18
Contributory Negligence Checklist 18
Comparative Negligence 18
McIntyre v. Balentine (No Contributory Negligence) 18
Comparative Negligence Example 19
Comparative Negligence Checklist 19
Assumption of Risk 20
Express 21
Seigneur v. National Fitness Institute 21
Implied 21
Rush v. Commercial Realty Co. (No Assumption Where No Safe Alternative) 21
Blackburn v. Dorta (No Assumption Of Risk Where Comparative) 22
Assumption of Risk Checklist 22
Statutes of Limitation and Repose 24
Teeters v. Currey (SOL Runs From Knowledge Or Should Have Known) 24
Statutes of Limitation and Repose Checklist 24
Vicarious Liability 25
Vicarious Liability 25
Respondeat Superior 25
Respondeat Superior: Scope of Employment 25
Bussard v. Minimed, Inc. (Course Of Conduct) 25
O’Shea v. Welch (Frolic/Detour) 26
Respondeat Superior: Employee or Independent Contractor? 26
Murrell v. Goertz (Independent Contractors) 27
Non-delegable duties 27
Maloney v. Rath 27
Joint Enterprise 27
Vicarious Liability Checklist 28
Strict Liability 30
Animals 30
Abnormally Dangerous Activities 30
Rylands v. Fletcher (Strict Liability) 30
Miller v. Civil Constructors, Inc. (Guns Not Ultra-Hazardous) 31
Indiana Harbor Belt Ry. Co. v. Am. Cyanamid Co. (Transportation) 31
Limitations on Strict Liability 31
Foster v. Preston Mill (Proximate Cause Evaluation) 31
Golden v. Amory (Acts of God) 32
Sandy v. Bushey (Vicious Animals) 32
Strict Liability Checklist 32
Products Liability 34
Development of Theories of Recovery 34
Negligence 34
MacPherson v. Buick Motor Co. (Knowledge of Danger, No Privity Needed) 34
Warranty (Torts + Contract) 34
Express Warranties 35
Baxter v. Ford Motor Co. (Representations From Manufacturer) 35
Implied Warranties 35
Henningsen v. Bloomfield Motors, Inc. (Merchantability) 35
Greenman v. Yuba Power Products (Liability Governed By Strict Liability) 36
Manufacturing Defects 36
Rix v. General Motors Corporation (Requirements For Manufacturing Defects) 36
Design Defect 37
Prentis v. Yale Manufacturing Co. (Negligence Analysis) 37
O’Brien v. Muskin Corporation (Risk-Utility) 37
Products Liability – Proof 37
Friedman v. General Motors Corporation (Circumstantial Evidence Ok) 37
Defenses to Products Liability Actions 38
Plaintiff’s Conduct 38
Daly v. General Motors Corporation (Comparative Applies In Products Liability) 38
Ford Motor Co. v. Matthews (Misuse Of A Product Governed By Foreseeability) 39
Pre-Emption and Other Government Actions 39
Medtronic, Inc. v. Lohr 39
Defendants Other than Principal Manufacturers / Harm Other than Personal Injury 39
Other Suppliers of Chattels 39
Peterson v. Lou Bachrodt Chevrolet Co. (Retailers Not Liable) 40
Harm Other Than Personal Injury 40
Successor Liability 40
Services 40
Hector v. Cedars-Sinai Medical Ctr. (Service Providers Exempt) 40
Products Liability Checklist 40
Trespass 50
Trespass 50
Trespass to Land 50
Dougherty v. Stepp (No Need For Damage) 50
Bradley v. American Smelting and Refining Co. (Trespass/Nuisance) 50
Herrin v. Sutherland (Violation Of Airspace) 51
Rogers v. Board of Road Commissioners for Kent County (Licenses) 51
Trespass to Land Checklist 51
Trespass to Chattels 52
Glidden v. Szybiak (Must Show Interference) 52
CompuServe, Inc. v. Cyber Promotions, Inc. 52
Trespass to Chattels Checklist 52
Conversion 52
Nature of the Tort 52
Pearson v. Dodd 53
Conversion Checklist 54
Nuisance 55
Philadelphia Electric Co. v. Hercules Inc. (No Duty Between Vendor-Vendee) 55
Morgan v. High Penn Oil Co. (Intention, Reasonable Person Standard) 55
Carpenter v. The Double R Cattle Co., Inc. (Harm Versus Utility) 56
Winget v. Winn-Dixie Stores, Inc. (Necessary Acts Of Businesses) 56
Boomer v. Atlantic Cement Company (Permanent Damages) 56
Spur Industries, Inc. v. Del E. Webb Development Co. (Coming To Nuisance) 57
Nuisance Checklist 57
Defamation 59
Nature of a Defamatory Communication 59
Belli v. Orlando Daily Newspapers, Inc. (Definition of Defamatory) 59
Grant v. Reader’s Digest Association (Definition of Libel) 59
Killian v. Doubleday & Company, Inc. (Where Defense of Truth Unavailable) 60
Neiman-Marcus v. Lait (Group Defamation) 60
Bindrim v. Mitchell (Test of Identification) 60
Malice 60
New York Times Company v. Sullivan (Actual Malice Required) 61
St. Amant v. Thompson (Serious Doubts As To Truth) 62
Falsity 62
Philadelphia Newspapers, Inc. v. Hepps 62
Characteristics of a Public Figure/Official 63
Opinion 63
Milkovich v. Lorain Journal Company (Opinion Not Protected) 63
Privileges 63
Remedies 63
Defamation Checklist 64
Tortious Interference 68
Business Relations 68
Injurious Falsehood 68
Ratcliffe v. Evans 68
Slander of Title 68
Horning v. Hardy (Requires Actual Damage) 68
Testing Systems, Inc. v. Magnaflux Corporation (Puffery) 69
Interference With Existing or Prospective Contractual Relations 69
Lumley v. Gye (Malicious Interference With K) 69
Bacon v. St. Paul Union Stockyards Co. (Interference With Employment) 69
Della Penna v. Toyota Motor Sales U.S.A., Inc. (More Than Interference Needed) 70
Interference With Advantageous Relationships 70
Adler, Barish, Daniels, Levin and Creskoff v. Epstein 70
Brimelow v. Casson (When Interference Is Justified) 71
Harmon v. Harmon (Expectancy Of Future K) 71
Tortious Breach of Contract 71
Freeman & Mills, Inc. v. Belcher Oil Company 71
Neibuhr v. Gage 72
Tortious Interference Checklist 72
Misrepresentation 74
Concealment and Non-Disclosure 74
Swinton v. Whitinsville Savings Bank (No Duty To Disclose) 74
Griffith v. Byers Construction Company of Kansas (Disclose Material Defects) 74
Basis of Liability 75
To the Recipient 75
Derry v. Peck 75
International Products Company v. Erie Ry. Company (Giving Information) 75
Misrepresentation 75
Winter v. G.P. Putnam’s Sons (No Duty For Publishers) 75
Hanberry v. Hearst Corporation (Endorser Liability) 76
Richard v. A. Waldman and Sons, Inc. (People With Special Knowledge) 76
To Third Persons 77
Credit Alliance Corporation v. Arthur Andersen & Co. (Approaching Privity) 77
Citizen’s State Bank v. Timm, Schmidt & Co. (Foreseeability Of Use) 77
Ultramares Corporation v. Touche, Nivens & Company 77
Reliance 78
Williams v. Rank & Son Buick (Opportunity To Inspect) 78
Opinion (When Reliance Is Not Reasonably Justifiable) 78
Saxby v. Southern Land Company (Must Be Misstatement Of Fact) 78
Vulcan Metals Co. v. Simmons Manufacturing Co. (Dealer Talk) 79
Misrepresentations about the Future 79
Misrepresentation Checklist 79
Damages
Types of Damages
1. Nominal (more to vindicate rights, usually a maximum of $100)
2. Compensatory (to alleviate harm done; to make whole)
3. Punitive (punishment and deterrence)
Elements of Compensatory Damages
1. Past and future physical pain
2. Past and future mental pain
3. Past and future medical expenses
4. Past and future loss of earnings
5. Permanent disability and disfigurement (i.e. loss of enjoyment of life)
For practical reasons, future medical expenses are calculated at trial, as opposed to when these bills come due. This is because it prevents future litigation, and provides some closure to plaintiffs and defendants. There are a number of facts to consider when determining future medical expenses. You have to consider inflation, as well as the discount rate (interest). Other factors include life expectancy and work life expectancy.
Discount and Inflation Methods
Courts use three methods to account for discount and inflation:
1. Inflation-discount method: increases expected future earnings to account for inflation, then discounts present value by the market interest rate. Consider inflation and interest separately.
2. Real interest method: “real” interest rate (difference between nominal interest rate and the inflation rate) is perceived to be stable (1-3%), regardless of the level of inflation. Consider each together.
3. Total offset method: assumes as a matter of law that the market interest rate that would be used to discount damage awards is completely offset by inflation in computing lost future income.
General Versus Special Damages
General: pain and suffering, distress, etc. (non-economic in nature)
Specific: lost earnings, medical expenses (economic in nature)
Remittitur And Addititur
Remittitur reduces a payout. Addititur increases a payout.
Two principle approaches:
1. Maximum Recovery Rule: The maximum that a reasonable jury could award (Anderson v. Sears, Roebuck).
2. Outside The Range Of Fair And Reasonable Compensation: Must exceed the range of fair and reasonable compensation, or is the result of prejudice, or it shocks the conscience (Richardson v. Chapman).
The Richardson approach is preferable, as it makes overruling the trier-of-fact more rare than the Anderson approach.
Legislative Tort Reform
Movement by legislatures to put caps on damage recoveries on some, certain, or all types of injuries.
Montgomery Ward v. Anderson
- Discounted medical services are a collateral source not to be considered in assessing the damages owed by a tortfeasor to a plaintiff in a personal injury suit.
- Only relevant for a purpose other than mitigation of damages
- Collateral source rule requires court to exclude evidence of payments received by an injured party from sources collateral to the tortfeasor
- Reason: to not benefit wrongdoer, even if it results in multiple recoveries
- Does not apply where:
o To rebut testimony of the plaintiff that he returned to work prematurely, or did not receive additional medical care from financial need.
o Plaintiff's condition attributable to some other cause
o Impeachment of plaintiff that he paid expenses himself
o To show plaintiff continued to work if he claimed to be out of work
Expenses of Litigation
In the United States, unless there is a specific statute, everyone bears their own cost of litigation. As a result, the United States relies on the contingency-fee system. All that the plaintiff has to file in the meantime is front-end costs (court costs, expert costs, copying costs, etc.). This is in contrast with the Canadian/British model, which utilizes a shifting cost system.
Structured Settlements
Because of the way the U.S. tax system is structured, you are often better to accept a structured settlement, versus a lump sum. If you take the lump sum, all the interest is taxable as you earn it. If you take the structured settlement, they are considered damages of a tort settlement, and are tax-free.
Zimmerman v. Ausland (Avoidable Consequences Rule)
- A tort victim may not recover damages for a permanent injury if an operation could correct the injury, and a reasonable person would undertake the operation.
- Known as the avoidable consequences rule (duty to mitigate). Consider risk, cost and probability of success.
Physical Harm to Property
If property is destroyed or converted à entire value at time of tort.
If partially destroyed à difference in value.
Deprivation of use à value of temporary possession.
Usually market value as a whole (not parts or pieces). Usually get the highest market value that could be reasonably obtained.
Punitive Damages
Usually for intentional torts, or for recklessness, or in certain statutory circumstances. Almost never for mere negligence. Usually need something malicious, outrageous or reckless about a person’s contact.
Punitive damages are awarded to deter future behaviour and to punish past behaviour. However, there are a number of limits on the amount of punitive damages you may be awarded.
Cheatham v. Pohle (Punitive Damages May Be Limited)
- A law requiring a person who was awarded punitive damages to pay 75% to the state is not an unconstitutional taking.
- Punitive damages are quasi-criminal. There is an element of general/specific deterrence.
- Legislatures have broad discretion to eliminate or modify punitive damages.
- Plaintiff has no right to punitive damages per se, even when they may be appropriate.
- Plaintiff has no property to be taken, except to the extent state law creates a property right.
State Farm Mutual Automobile Insurance v. Campbell (Excessive Awards)
- Punitive damages of $145mm are excessive, and in violation of the DPC, when compensatory damages are only $1mm.
- Compensatory damages intended to address concrete losses
- Punitive damages are about punishment, and deterrence.
- There are limits to these awards
- DPC denies excessive awards, as they are arbitrary deprivations of property
- 3 guideposts:
o Degree of reprehensibility of conduct
§ Consider physical v. economic, disregard for health or safety, financial vulnerability, repeat actions, intent, etc.
o Difference between compensatory and punitive damages
§ No more than 9:1 or 10:1. No less than 1:1.
o Difference between punitive award, and penalties in comparable cases
§ Can consider criminal penalties as a guidepost
Damages Checklist
A. Personal Injury Damages:
1. Actual Injury required: In any negligence action, existence of actual injury is required. Unlike intentional torts, nominal damages may not be awarded.
a. Physical Injury required
b. Elements of damages: Once physical harm has been proven, a variety of damages may be recovered:
i. Direct Loss: Value of any direct loss of bodily functions.
ii. Economic Loss: Includes medical expenses, lost earnings, etc.
iii. Pain and Suffering