Transcript Business & Law of Torts

ELEMENTS OF TORTS
Chapter 6
Meiners, Ringleb & Edwards
The Legal Environment of Business, 12th Edition
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TORTS AND THE LEGAL SYSTEM
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Definition

The word tort derived from Latin tortus or “twisted”. Means “wrong” in
French
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Civil wrong, other than a breach of contract, for which the law
provides a remedy
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Breach of a duty owed to another that causes harm
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Arises from careless errors or intentional actions
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Law reflects social values and community standards
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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
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BUSINESS AND TORTS
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Categories
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Negligence
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Intentional
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Strict Liability
Business becomes involved through
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(1) person is harmed by actions of business or its employees
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(2) a person is harmed by a product manufactured or distributed
by the business
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(3)a business is harmed by the wrongful actions of another
business or person
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Some torts are generally unique to businesses (Chapter 7)

Torts can be specific to property (Chapter 8)
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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.
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However, the basic principles are similar among all states.
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Remedies should place injured party in the position
he/she would have been in prior to the tort.
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Fear of tort action deters injurious behavior by others.
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Punitive damages punish malicious or extremely
reckless behavior.
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NEGLIGENCE-BASED TORTS
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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
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INTERNATIONAL PERSPECTIVE
“NO LITIGATION JACKPOTS IN NEW
ZEALAND”
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New Zealand has common-law system
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But has abandoned tort suits for damages in personal
injuries.
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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.
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DUTY OF CARE
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Reasonable Person Standard: The standard is how
persons in the relative community ought to behave
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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.
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Standard: what a reasonably skilled, competent and experience
person in that profession would do
See Squish La Fish v. Thomco
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CASE
SQUISH LA FISH V. THOMCO SPECIALTY PRODUCTS
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Squish holds patent on “Tuna Squeeze” (squeezes water or oil from
tuna cans); ProPack was hired to assist with store displays.
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ProPack brought in Thomco for advice on adhesive for the displays.
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Thomco said the adhesive would wash off; Squish relied on the advice,
but adhesive wouldn’t wash off.
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A Squish distributor was not happy with the situation; cancelled its
contract so huge business loss to the small company.
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Squish sued Thomco for negligent misrepresentation.
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District Court granted summary judgment for Thomco; Squish appealed.
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Held: Reversed and remanded
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Disputed issues to go before the trial court
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There may have been reliance by Squish through ProPack on Thomco’s
representations.
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CAUSATION
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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.
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CASE
PALSGRAF V. LONG ISLAND RR CO.
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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.
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Guards try to help him as he teeters.
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He drops the package which contains fireworks that explode.
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Shock from the explosion causes scales located on the platform to
fall, injuring Palsgraf who sues RR for negligence of its employees.
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Jury finds for Palsgraf; appellate court affirms; RR appeals.
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Issue: Is it foreseeable that the assistance by the guards would
cause Palsgraf’s injury through the falling scales?
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Held: No. Nothing in the situation would suggest such a result. A
bizarre situation that cannot be expected.

Case reversed and dismissed.
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EVOLVING CHANGES IN THE
LAW OF NEGLIGENCE
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Thompson v. Kaczinski (2009 Iowa Supreme Court case)
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Adopted some portions of Restatement (Third) of Torts
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Need not focus on ordinary duty of reasonable care – this duty is
presumed where there is risk of physical harm.
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Instead, court should “proceed directly to the elements of liability”.
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Less reliance on proximate case – “has been a source of significant
uncertainty & confusion”.
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Move also away from “substantial factor”.
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INSTEAD, Restatement Third refers to the “scope of liability” related to
risks present in a specific situation.
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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.
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DEFENSES TO A NEGLIGENCE ACTION
Assumption of Risk
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The injured party knew or
should have known of the risk
and voluntarily assumed it.
Comparative Negligence
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Damages are reduced by the % of
injuries caused by the plaintiff’s
own negligence
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Complete bar to the plaintiff’s
case
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Replaced old rule old rule of
contributory negligence
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May be based on liability
waiver or exculpatory clause
in a contract
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Term contributory negligence still
used, but for damages, the rule of
comparative negligence is
employed
See Geczi v. Lifetime Fitness
See Issue Spotter: “Effective
Liability Releases”

See Exhibit 6.2
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CASE
GECZI V. LIFETIME FITNESS
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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)
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CASE
GECZI V. LIFETIME FITNESS
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Issue: Whether reasonable minds can only conclude that documents Geczi
signed constituted a valid release of claims against Lifetime.
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Previously courts recognize that law does not favor release from liability for
future tortious conduct. Releases are narrowly construed.
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However, clear & unambiguous contract clauses relieving a party from liability
for its own negligence are generally upheld in Ohio.
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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.”
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Release did not distinguish between types of negligence but extended to ANY
injury resulting from Lifetime’s negligence.
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Language in document extends to negligence in maintaining equipment, leaving
defective equipment available to users, and failing to warn of defects.
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Jury looked at question if Lifetime’s failure to act or warn was “willful or wanton
conduct” – found Lifetime was not.

HELD: Judgment Affirmed.
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INTENTIONAL TORTS AGAINST PERSONS
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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”
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INTENTIONAL TORTS AGAINST PERSONS
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Assault
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Battery
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False Imprisonment or False Arrest
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Infliction of Emotional or Mental Distress
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Invasion of Privacy
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Defamation: Libel and Slander
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See Exhibit 6.3
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ASSAULT
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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:
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Threats? Usually an assault
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Pointing a gun? Yes
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Point a gun while other person sleeps? No assault
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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?
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BATTERY
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Unlawful “touching”
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Intentional physical contact without consent
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Even if no actual physical harm, offense to a “reasonable
person’s sense of dignity” may constitute a battery
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Use of fist, hand, or kicking
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Use of weapons, i.e. guns or stick
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Unwanted kiss? Has been held in some states to
constitute battery

Assault & Battery often linked together in a lawsuit
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DEFENSES
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Consent
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Privilege
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Self defense
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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
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See Exhibit 6.3
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CASE
FUERSCHBACH V. SOUTHWEST AIRLINES
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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)
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CASE
FUERSCHBACH V. SOUTHWEST AIRLINES
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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.
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FALSE IMPRISONMENT
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Intentional holding, detaining
or confinement
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Freedom to come and go is
restrained
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Defense by businesses
regarding detention of
shoplifters
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Restraint was in a
reasonable manner
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Restraint was in a
reasonable time
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Basis for the detention was
valid
Restraint or Confinement
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May be physical
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May be mental (i.e.
through verbal threats)
Lawsuits often arise from
detention of suspected
shoplifters

See Forgie-Buccioni v. Hannaford
Brothers
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CASE
FORGIE-BUCCIONI V. HANNAFORD BROTHERS
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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)
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CASE
FORGIE-BUCCIONI V. HANNAFORD BROTHERS
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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.
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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
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See Issue Spotter “Dealing With the Elderly and their Heirs”
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CASE
LAWLER V. MONTBLANC
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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)
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CASE
LAWLER V. MONTBLANC
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(Appeals court affirmed that Lawler had no claim for disability.)
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California’s cause of action for intentional infliction of emotional distress:
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(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
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”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
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Schmitz’s “gruff”, “abrupt,” and “intimidating” conduct cannot be characterized as
“exceeding all bounds of that tolerated civilized community.”
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Criticism he made related to store’s business operations & Lawler’s performance.
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He was inconsiderate and insensitive in communicating his dissatisfaction.
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However, the alleged emotional distress is not “severe”
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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.
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INVASION OF PRIVACY
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Infringement on a person’s right of solitude & freedom from
unwarranted public exposure
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Use of a person’s name or picture without permission
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Intrusion on solitude (i.e. wiretap)
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Placing a person in false light (publishing a false story)
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Public exposure of private facts (debts, drug use)
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Defenses
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Right of privacy waived by public figures, politicians, entertainers,
sports personalities, etc.
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Information about an individual taken from public files or records
See James v. Bob Ross Buick
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CASE
JAMES 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.
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After firing, Buick company sent batches of letters to customers
who had worked with James. Letters encouraged them to shop for
Mercedes.
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Letter addressed as if they were from James. Administrative
assistant at Bob Ross signed James’s name to the letters.
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James sued for misappropriation of his name, a form of invasion of
privacy.
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Trial Court: Summary judgment for Bob Ross. James appealed.
(Continued)
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CASE
JAMES V. BOB ROSS BUICK, INC.
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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.
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DEFAMATION
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Definition: An intentional false communication that
injures a person’s or company’s reputation or good
name
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Slander: spoken defamation
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Libel: written or television broadcast defamation
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Elements of the Tort:
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False or defamatory statement
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Published or communicated to a third person
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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.
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DEFAMATION
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Defamation per se: Presumption of harm
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No proof of harm/injury is necessary
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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.
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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
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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).
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DEFENSES TO DEFAMATION
Truth is a complete defense in some states
 Absolute privilege is an immunity
 Legislators in committee sessions
 Participants 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 privilege
 Members of the press may publish “opinion” about
public officials, figures, or those of public interest if
there is no actual malice (“absence of malice”)

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CASE
CHAMBERS V. TRAVELERS
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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)
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
CASE
CHAMBERS V. TRAVELERS

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”.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.