Chapter 9 Torts

1. Chapter 9 Torts

2. Chapter Objectives 1. Explain how torts and crimes differ. 2. State the purpose of tort law. 3. Identify some intentional torts against persons and business relationships. 4. Describe some intentional torts against property. 5. Name the four elements of negligence.

3. Torts A tort is a civil wrong not arising from a breach of contract. A tort is a breach of a legal duty that proximately causes harm or injury to another. Business Tort:The wrongful interference with another’s business rights. 3

4. Case 9.1 Wal-Mart Stores, Inc. v. Resendez • Raul Salinas, store security guard, saw Lucia Resendez eating a bag of peanuts with a Wal-Mart sticker. After eating them, she discarded the bag and left the store. The guard accused her of stealing the peanuts. She claimed she bought them at another Wal-Mart store the day before. Resendez was arrested and convicted of misdemeanor theft. The conviction was overturned, and Resendez filed suit alleging false imprisonment. Resendez won, and Wal-Mart appealed. • What might be the result for society if businesses were held liable every time they detained a customer?

5. Case 9.2 Roachv. Stern • Deborah Roach, known as “Debbie Tay,” was a guest on the Howard Stern Show, where she discussed her purported sexual encounters with female aliens. She later died from a drug overdose, and the cremated remains were given to her friend, Chaunce Hayden. Hayden went on the Howard Stern Show and the participants of the show joked about her remains. Tay’s brother and sister filed a suit against the show for $8 million for intentional infliction of emotional distress. The case was dismissed but later remanded for trial. • What would be the result for society if broadcasters such as Howard Stern were never held liable for any distress caused by their broadcasts?

6. Defamation in the Business Context A false statement that injures someone in a profession, business, or trade or that adversely affects a business entity in its credit rating and other dealings.

7. Liability for Online Defamation • One of the most significant legal issues regarding defamation in the business context is the liability of online service providers for the speech of others who use their services. • The answer depends on whether the service providers are classified as a publisher or a distributor of the information. What does that mean? • What are some of the pros and cons of defining online information services as distributors? As publishers?

8. The use by one person of another’s name, likeness, or other identifying characteristic, without permission and for the benefit of the user. Appropriation

9. Wrongful Interference • Businesses may generally engage in whatever is reasonably necessary to obtain a fair share of a market or to recapture a share that has been lost. They are not permitted to use unfair methods of competition or to wrongfully interfere with business relations of others. • Wrongful interference generally falls into two categories: • Interference with a Contractual Relationship • Interference with a Business Relationship

10. Interference with a Contractual Relationship • Intentional interference with a valid, enforceable contract by a third party. • Three elements: • A valid enforceable contract • Third party must know of the contract • Third party must intentionally cause a party to break contract

11. Interference with a Business Relationship • Unreasonable interference by one party with another’s business relationship. • Three elements: • An established business relationship • A third party, by use of predatory methods, intentionally causes relationship to end • Plaintiff suffered damages

12. Defenses to Wrongful Interference Defenses to claims of wrongful interference include bona fide competitive behavior such as: • Aggressive marketing • Effective advertising • Superior products

13. Intentional Torts against Property • Trespass to land—the entry onto, above, or below the surface of land owned by another without the owner’s permission or legal authorization. • Trespass to personal property—the unlawful taking or harming of another’s personal property. • Conversion—the wrongful taking or retaining possession of a person’s personal property and placing it in the service of another.

14. Disparagement of Property • Slanderous or libelous statements made about another’s product or property. • More specifically, these are referred to as: • Slander of Quality (trade libel) • Slander of Title • What’s the difference between the two?

15. Slander of Quality Publishing false information about another’s product, alleging it is not what its seller claims. Slander of Title Publication of a statement that denies or casts doubt on another’s legal ownership of any property, causing financial loss to that property’s owner. Disparagement of Property

16. Duty of Care • The duty of all persons, as established by tort law, to exercise a reasonable amount of care in their dealings with others. • Failure to exercise due care, which is normally determined by the “reasonable person standard,” constitutes the tort of negligence.

17. Case 9.3 Martin v. Wal-Mart Stores, Inc. • Harold Martin slipped and fell on loose shotgun pellets in the sporting goods aisle at a Wal-Mart store. He eventually lost sensation to the front half of his left foot, which was diagnosed as permanent. He filed a suit against Wal-Mart. The jury found in his favor, and the court denied Wal-Mart’s motion for a direct verdict. • If you managed a self-service store such as Wal-Mart, what steps might you take to exercise “due care” in maintaining the safety of the premises?

18. The Injury Requirement and Damages • For a tort to have been committed, the plaintiff must have suffered a legally recognizable injury. • Damages awarded in tort lawsuits include: • Compensatory damages—a money award equivalent to the actual value of injuries or damages sustained by the aggrieved party. • Punitive damages—money damages that may be awarded to a plaintiff to punish the defendant and deter future conduct.

19. Causation in Fact and Proximate Cause • In deciding whether there is causation, the court must address two questions: • Is there causation in fact? • Was the act the proximate cause of the injury?

20. Palsgraf v. Long Island Railroad • The plaintiff, Palsgraf, was waiting for a train on a platform. A man rushing to catch a train was about to fall when two railroad guards helped him onto the train causing him to drop his package containing fireworks. An explosion caused scales to fall on Palsgraf, who was injured. She sued for damages. At the trial, the jury found the railroad guards negligent. The New York Court of Appeals concluded that the guards were not negligent because her injury was not reasonably foreseeable. • If the guards knew that the package contained fireworks, would the court have ruled differently? Would it matter that the guards were motivated by a desire to help the man board the train and not by a desire to harm anyone?

21. How Far Should Foreseeability Extend? • Tonya Brown was using a pay phone as her friend Anita Addison stood nearby. A car driven by Ruby Greer veered out of control and crashed into the booth, injuring both girls. Brown and Addison’s guardian sued Michigan Bell Telephone, Inc., for damages. The plaintiffs argued that Bell should have placed the booth in a “safer” place. Bell contended that the accident was not foreseeable, and the driver was high on crack, had no license, and was fleeing a robbery. The Michigan appellate court concluded it was foreseeable and awarded monetary damages. • In regard to the Michigan Bell case, the defendant telephone company was much “wealthier” than the driver of the car that crashed into the phone booth. Should wealth enter into the picture when making decisions regarding tort liability?

22. Defenses to Negligence There are three basic affirmative defenses in negligence cases: • Assumption of risk • Superseding cause • Contributory negligence

23. Case 9.4 Crews v. Hollenbach • Byers Engineering Company was retained to locate buried utility lines in an area where cable lines were to be buried. Honcho & Sons, Inc., were hired to do the job. An employee struck a natural gas line owned by Washington Gas Co., but failed to report it. The smell was noticed a mile and a half away, and the fire department was called. Washington Gas sent a crew to fix the leak, including foreman Lee James Crew. An explosion occurred, severely injuring Crew, and he filed a suit against Hollenbach and the others. The court agreed to the motion claiming Crew assumed the risk of an explosion by virtue of his occupation. • Whether Hollenbach was negligent in striking the gas line was not an issue in this case. Why?

24. Negligence Per Se An action or failure to act in violation of a statutory requirement. The injured person must prove: • That the statute clearly sets out what standard of conduct is expected, when and where it is expected, and of whom it is expected. • That he or she is in the class intended to be protected by the statute. • The statute was designed to prevent the type of injury that he or she suffered.

25. For Review 1. What is the function of tort law? 2. What are some examples of torts against persons or business relationships? 3. What are some examples of torts against property? 4. What are the four elements of negligence? 5. What defenses are available in an action for negligence?