Torts II – Spring 2003 Professor Timmons Page 1 Torts II I. Duty of Care A. Negligent Infliction of Emotional Distress 1. Old Rule – No duty of care owed to prevent pure emotional distress or NIED. i. Limit liability ii. Prevent fake claims 2. Variants of Old Rule i. Impact Rule a. Defendant actually touched plaintiff and plaintiff suffered emotional distress. b. Most courts have now rejected. c. Some courts combine with Physical Manifestations Rule ii. Physical Manifestations Rule a. Can recover for negligent infliction of emotional distress if distress results in physical injury. b. Conduct must be such that a normal person would suffer emotional distress. c. Difficulty in determining physical manifestation. d. Some courts combine with Impact Rule. iii. Zone of Danger Rule a. Plaintiff can recover if in zone in which conduct threatened injury and there was fear of physical injury. b. Used to be the rule in California. c. Some jurisdictions still use this theory. d. Problem is that it did not allow recovery in situations where it was foreseeable that ED would result (ex. Bystander cases). iv. Reasonable Foreseeability Rule a. Recovery for emotional distress is allowed based on reasonable foreseeability that distress would occur. 1) Three components i) Proximity ii) Visibility iii) Relationship between plaintiff and victim 2) Elements are non-dispositive v. Latest Variant a. Plaintiff may recover for ED if, and only if, the following elements are met. 1) Close relationship between plaintiff and victim. 2) Plaintiff is present at the scene and aware of injury to the victim. 3) Suffers severe emotional distress. vi. Courts typically use iv or v above. vii. Exceptions that allow recovery for NIED a. Death telegram rule 1) Recovery for emotional distress resulting from negligent transmission of a message announcing death Torts II – Spring 2003 Professor Timmons Page 2 b. Interference with dead bodies B. Unborn Children 1. Old Rule i. No duty of care if child was injured in utero, even if later born alive. 2. New Rule i. A child injured in utero can recover if born alive. 3. Most courts now follow rule that plaintiff can recover for wrongful death of unborn child. 4. Pregnant woman owing duty of care to take reasonable care to protect unborn children. i. Pros to liability a. All persons should have right to start life w/o injury. b. Society would bear cost of care for injured child. ii. Cons to liability a. Difficulty in determining causation of child’s injuries. b. Deters mother from seeking pre-natal care because it creates a record of the potential cause of injury. 5. Wrongful Birth i. Plaintiffs are parents. ii. Doctor’s negligence denied choice to continue pregnancy. iii. More accepted theory. iv. Controversial because it deals with right to abortion. v. Typically, courts have limited damages to a. Emotional distress of parents b. Extraordinary costs of raising child 6. Wrongful Life i. Plaintiff is child. ii. Not as accepted. iii. Controversial because it deals with right to abortion. iv. Few jurisdictions allow this COA and those that do limit damages as above. II. Owners and Occupiers of Land A. Outside the Premises 1. Generally, reasonable care must be taken to prevent harm to persons outside the premises. 2. Courts typically draw a distinctions depending upon whether the condition is natural or artificial. i. Natural a. Owner owed no duty of reasonable care to persons outside the premises. ii. Artificial a. Owner did owe a duty of reasonable care to persons outside the premises. 3. Another distinction depended upon whether property was urban or rural. 4. These factors may be relevant in terms of the owner’s breach of duty. 5. Courts have been more willing to require a duty to use reasonable care when the owner has taken active conduct. Torts II – Spring 2003 Professor Timmons Page 3 6. Trend is to hold that landowners generally owe a duty of care and to use the other factors to determine reasonable conduct and breach. B. On the Premises 1. Trespassers i. Undiscovered Trespassers a. General Rule – No duty of care owed to undiscovered trespassers. ii. Discovered Trespassers a. If and when trespasser is discovered, the landowner or occupier must use ordinary care to avoid injuring him by active operation. iii. Additional exceptions to general rule regarding trespassers a. Frequent trespassers on a limited area of the land. 1) Landowner required to anticipate the trespassers and to take reasonable care in his activities for their protection. b. Continued toleration of the trespass will operate as a license to use the land and the owner will have to follow rules regarding licensees. c. Dangerous conditions obvious to an owner. d. Trapped trespassers in peril. e. Railroad cases where presence is foreseeable and there is a high degree of danger to the trespasser. 2. Licensees and Invitees i. Licensees a. A licensee is one on the property of another for their own benefit or business. b. Duty owed to a licensee is to warn of potential dangers known to the owner and unknown to licensee. c. Cannot willfully or wantonly injure licensee. d. Social guests are licensees. e. The fact that a social guest renders an incidental service to his host does not change status to invitee. ii. Invitee a. An invitee is one on the property of another for the owner’s benefit or business or a mutually beneficial business relationship. b. Duty owed to invitee is to exercise reasonable care to keep the premises reasonably safe for the use of the invitee. c. Customers in a store are considered invitees, even if they do not buy anything. 1) Rationale is that a customer who does not buy still benefits owner. d. Other situations where person was held to be invitee 1) Those attending free public meetings. 2) Spectators at public amusements, even entering on a free pass. 3) Free use of a telephone for the public. 4) Entering a bank to get change. 5) Coming to get things advertised to be given away. Torts II – Spring 2003 Professor Timmons Page 4 6) Use of state or municipal land open to the public. 7) Visitors in national parks. iii. Status can change depending upon circumstances. iv. Sometimes, warnings are enough to constitute reasonable care under the circumstances. v. If, despite the warnings, one is injured as an invitee, the question becomes whether reasonable care was taken. vi. Liability for criminal acts of third parties a. Duty of care typically owed if invitor failed to take reasonable measures to reduce the likelihood of dangerous criminal activity. b. No duty of care typically when the invitors actions in the face of crime negligently endangered the invitee. 3. Persons Outside the Established Categories i. Child Trespassers a. Courts are uncomfortable with applying “no duty rule”. b. Attractive Nuisance Doctrine 1) When landowner places before children a temptation that he has reason to believe will lead them into danger, he must use reasonable care to protect them from harm. 2) Court typically have abandoned this doctrine. c. Restatement of Torts §339 1) A possessor of land is subject to liability for physical harm to children trespassing thereon caused by an artificial condition upon the land if: i) The place where the condition exists is one upon which the possessor knows or has reason to know that children are likely to trespass, and ii) The condition is one of which the possessor knows or has reason to know and which he realizes or should realize will involve an unreasonable risk of death or serious bodily harm to such children, and iii) The children because of their youth do not discover the condition or realize the risk involved in intermeddling with it or in coming within the area made dangerous by it, and iv) The utility to the possessor of maintaining the condition and the burden of eliminating the danger are slight as compared to the risk to children involved, and v) The possessor fails to exercise reasonable care to eliminate the danger or otherwise to protect the children. d. Some jurisdiction have placed limitations on rules that create a special duty to trespassing children 1) Courts have been reluctant to hold owner liable for common hazards that should be apparent to children of suitable age and discretion. Torts II – Spring 2003 Professor Timmons Page 5 2) Courts have also been reluctant to hold landowners responsible to protect children from naturally occurring hazards. ii. Persons privileged to enter irrespective of landowner’s consent. a. Courts are all over the place in deciding the duty owed in these types of cases. 1) Safety inspectors 2) Garbage collectors 3) Firemen 4) Policemen 4. Merging of Categories i. Some courts have decided that classifications in this area are not relevant. ii. Courts sometimes adopt ordinary negligence principles as the controlling factor. iii. Rationales for abandoning a. Morally wrong to hold that duty depends upon status b. Classifications seem to be arbitrary when applied. c. Reasonable people do not live by these classifications. iv. Rationales for keeping a. Offers predictability – cases can be decided on issue of duty alone. b. More cases will have to go to the jury because jury will have to decide whether duty was breached. c. Easier to apply. v. Most jurisdictions HAVE retained classifications. C. Lessor and Lessee 1. Traditionally, there was no duty owed by a landlord to either a tenant or the guest of a tenant. 2. Exceptions to general rule i. Undisclosed conditions known to landlord and not tenant. ii. Conditions dangerous to persons outside premises. iii. Premises leased for admission of the public. iv. Property retained in landlord’s control which tenant is entitled to use. v. Where landlord contracts to repair. vi. Where landlord is negligent in making repairs and tenant knew repair was negligent. 3. Some courts have begun to apply ordinary negligence theories in these cases, but this is not the majority. 4. In Georgia, there is a statutory liability for failure to keep premises in repair. 5. Exculpatory clauses pre-empting liability are typically held to be void as against public policy. 6. Landlord’s duty for protection from crime i. Landlord has duty to take those measures of protection which are within his power and capacity to take, and which can reasonably be expected to mitigate the risk of crime committed against tenants. ii. Torts II – Spring 2003 Professor Timmons Page 6 III. Damages A. Three kinds of damages 1. Nominal i. Small sum of money awarded to the plaintiff in order to vindicate rights. 2. Compensatory i. Represent the closest possible financial equivalent of the loss or harm suffered by the plaintiff. 3. Punitive i. An additional sum, over and above the compensation of the plaintiff, awarded in order to punish the defendant. B. Proof of damages is a required element of negligence. C. Principles of Compensation for Injury 1. Purpose is to place plaintiff in same position if injury had not occurred. 2. The only tool available to compensate is money – jury must find a way to equate injury to money damages. 3. All damages, whether past, present, or future, must be awarded in a lump sum at time of verdict. Changes are irrelevant. 4. Judicial review of amounts awarded by jury is limited. Only reversed in most case if is “shocks the judicial conscience.” D. Elements of Damages 1. Past pain and suffering (physical and mental). 2. Future pain and suffering (physical and mental). 3. Past medical expenses. 4. Future medical expenses. 5. Lost earnings. 6. Loss of earning capacity. 7. Permanent disability and disfigurement. 8. Loss of enjoyment of life. E. Will need expert testimony to establish 1. Past and future medical expenses. 2. Past and future earnings. F. Loss of Future Earning Capacity Issues 1. Must show evidence of likelihood of plaintiff being out of workforce. 2. Jury must estimate how much plaintiff would have earned. 3. Expert testimony is used to establish. G. In most jurisdictions, lump sum award is reduced to its present value. 1. Theory is to give a lump sum that will provide a stream of income over the time period equal to the award. H. Award of compensatory damages is not taxable. I. Award of punitive damages is taxable. J. Lump sums are preferred for judicial economy and finality of judgment. K. Most jurisdictions adjust for inflation but disagree as to how to do it. L. Remittitur 1. Plaintiff can accept lower amount of damages found by judge OR new trial on damages. M. Non-economic losses for physical pain and suffering 1. Only recoverable if conscious. Torts II – Spring 2003 Professor Timmons Page 7 2. Loss of function or appearance. N. American courts generally deny damages for the shortening of life expectancy. O. Caps on pain and suffering are sometimes instituted by legislature. 1. Rationale is that this makes those responsible aware of what the liability actually is. 2. Cap only hurts those that are most injured. P. Collateral Source Rule 1. A trial court must exclude evidence of payments received by an injured party from sources except defendant. i. Gratuitous benefits ii. Health or life insurance, Government benefits 2. Goes against compensatory theory of damages. 3. Rationale i. Damages are a deterrent. Taking these payments into account may result in underdeterrence. 4. Insurance agreement may provide that plaintiff has to pay back any damage award. 5. Most courts say defendant should pay reasonable value of services given by family to plaintiff. 6. Some states, including GA, have abolished the collateral source rule. i. Some courts require subtraction of collateral source monies. ii. Some courts allow jury to make the decision whether to subtract. Q. Duty to Mitigate Damages 1. General rule is that plaintiff cannot claim damages for what would be a permanent injury if the permanency of the injury could have been avoided by submitting to treatment by a physician when a reasonable person would do so under the same circumstances. 2. Factors to consider to determine if reasonable person would consent to procedure i. Risk ii. Probability of success iii. Expenditure of money or effort involved. 3. Burden is on defendant to prove that plaintiff did not mitigate. 4. Rationale is that duty to mitigate prevents a moral hazard involved if plaintiff did nothing. R. Damages for loss of property 1. Market value if property taken forever. 2. Difference between market value before and after when property is returned damaged. 3. “Rental Value” when property is returned undamaged. S. Punitive Damages 1. Above and beyond compensation for injury. 2. To punish defendant. 3. To deter similar acts. 4. Without punitive damages, deterrence might not be as effective. 5. Standards for awarding punitive damages varies by jurisdiction i. Bare negligence does not justify punitive damages. Torts II – Spring 2003 Professor Timmons Page 8 ii. Reckless disregard, willful, wanton, etc. are words that describe justification for award of punitive damages. 6. U.S. Supreme Court held that when punitive damages are grossly excessive in relation to reasons state allows punitive damages, it violates Due Process. i. Guidelines a. Reprehensibility of conduct. b. Disparity between harm and actual compensatory damages. c. Difference in award and civil penalties allowed by statute for same conduct. 7. Wealth of defendant is relevant because punitive damages are designed to punish and a small award against a wealthy defendant would not be punitive. IV. Defenses to Claims of Negligence A. Come into play after plaintiff has made prima facie case for negligence. B. Plaintiff’s Conduct 1. Contributory Negligence i. One person being in fault will not excuse another from using ordinary care for himself. ii. If plaintiff failed to use reasonable care and failure was cause in fact of injury, plaintiff cannot recover. iii. Contributory negligence is a complete bar to recovery. iv. Rationales a. If careless enough to be even partially responsible, plaintiff should not be allowed to recover. b. Plaintiff’s conduct is a superseding cause so that defendant’s conduct is no longer proximate cause of injury. v. Contributory negligence encourages plaintiffs to take reasonable care and may lead to safer environment. vi. Contributory negligence is abolished in all but four states (AL, NC, VA, MD) and DC. vii. Contributory negligence is a punitive system and has been seen to be unfair to deserving plaintiffs. viii. Courts found various ways around contributory negligence a. Leaving contributory negligence question to the jury. Juries would award lower damages instead of finding contributory negligence. b. A person is only contributorily negligent for foreseeable risks. c. Courts would get creative with proximate cause. 1) Last clear chance doctrine – If defendant had last clear chance to avoid the harm after the plaintiff was no longer available to the plaintiff, the defendant should bear the loss. 2. Comparative Negligence i. Proportionate of negligence and apportioning of damages appropriately. ii. Doctrine is not a complete bar, but reduces award based on proportion of plaintiff’s negligence. iii. Forms of Comparative Negligence Torts II – Spring 2003 Professor Timmons Page 9 a. Pure – Plaintiff recovers proportion that they were not responsible for. Even plaintiffs who are 90% negligent can recover 10%. b. Modified (Less Than or Equal to 49%) – Plaintiff can recover as long as their negligence is lower than the defendant’s. c. Modified (Less Than or Equal to 50%) – Plaintiff can recover as long as their negligence was equal to or lower than defendant’s. iv. Juries like 50/50 award and thus distinction is important. v. In cases of multiple tortfeasors, generally P’s fault must be less than the combined fault of all defendants – Depends on jurisdiction. vi. As a general rule juries consider two factors in determining fault a. Relative culpability – how far was each party from standard of care? b. Causative potency – proximity of each party to being the cause of the injury. vii. Apportioning fault is always a jury question and reviewing courts do not typically overturn. viii. Legislatures have typically codified comparative negligence instead of leaving common law questions open. ix. Joint and Several Liability a. At common law, common tortfeasors combining to cause injury to plaintiff, each of actors is liable for harm to plaintiff 1) Plaintiffs could recover 100% of damages from any one defendant. 2) Court have held that this is unfair to defendants under comparative negligence. 3) When there is J&S liability, burden is on P to find all defendants responsible for injury. 4) Not all jurisdictions have abolished J&S liability – No majority on this point. 3. Assumption of Risk i. Express a. Generally, exculpatory clause is valid unless 1) It covers extreme forms of negligence (willful, wanton, reckless, or gross) 2) It covers intentional torts 3) It concerns a public interest 4) The negligence consists of violation of a statute. 5) The clause is a result of a disparity in bargaining power. b. In looking to determine if express assumption of risk, evaluate 1) Whether the risk that injured the plaintiff is covered by the release. 2) Whether the release violates public policy. c. Majority of jurisdictions have held exculpatory clauses invalid in medical situations. ii. Implied a. Two components Torts II – Spring 2003 Professor Timmons Page 10 1) Voluntary assumption 2) Known risk b. Plaintiff must have subjectively known. Standard is NOT reasonable person. iii. Courts have attempted to ameliorate assumption of risk by narrowing the specific risk that is assumed. iv. Sometimes tricky to distinguish between assumption of risk and contributory negligence. a. Ways to distinguish 1) Contributory negligence uses objective standard. 2) Contributory negligence has unreasonable conduct. v. Primary assumption of risk a. Defendant was not negligent at all because there was no breach of duty. vi. Secondary assumption of risk a. Strict – plaintiff’s recovery is barred by any voluntary assumption of a known risk. b. Qualified – plaintiff’s recovery is barred only by an unreasonable assumption of a known risk. vii. A growing number of courts have held that implied assumption of risk does not remain an affirmative defense separate and apart from contributory negligence. C. Statutes of Limitations and Repose 1. Statutes of Limitations i. Statute of limitations limit the amount of time in which as case can be brought. ii. Reasons for SOL a. Provides closure for possible actions. b. To prevent stale claims iii. General Rule -SOL begins to run when the plaintiff is injured. iv. Typical tort SOL is 2 years. v. Medical malpractice cases typically use the “Discovery Rule” – SOL does not begin to run until injury is discovered or should have been discovered. vi. Discovery rule has been extended in many jurisdictions to other latent injuries. 2. Statutes of Repose i. Statutes of repose limit time in which cause of action may arise. ii. Common for products liability. iii. After a certain number of years after a product is made or sold, no cause of action exists. iv. Idea is that potential liability must be cut off after certain times. v. Typically applies to product manufacturers, architects, engineers, etc. D. Immunities 1. Spousal Immunity i. Has generally been abolished in most jurisdictions 2. Parent/Child Immunity Torts II – Spring 2003 Professor Timmons Page 11 i. Also has been generally abolished, especially in auto accident context. ii. Immunity has been kept for torts arising out of parental authority. 3. Charitable Immunity i. Has been abolished in most jurisdictions. ii. Rationale was to let people go without compensation instead of requiring charity to go under. iii. Most charities today are run like businesses and carry liability insurance. V. Vicarious Liability A. Respondeat Superior 1. Employer liable for torts of employees. 2. Two elements i. Employer/Employee relationship. ii. Acting within scope of employment. a. Acting in furtherance of the duties owed to the employer and the employer exercises some control over the employee’s actions. 3. Courts also use “Enterprise Theory” – enterprise is benefited by actions of employee and it is justified to hold employer liable. 4. Policies behind respondeat superior. i. Innocent parties should not bear damages caused by another. ii. Effort by courts to find a deeper pocket. 5. Party that is held vicariously liable has a right of indemnity against other defendant. i. Employer could sue employee but is pretty rare. 6. If it is too easy to hold employers liable, this will be an over-deterrence and can discourage employment. 7. Respondeat superior liability applies regardless of how careful the employer was. 8. Vicarious liability is liability without fault of your own simply because of relationship with tortfeasor. 9. Vicarious liability is still good for deterrence because employer has incentive to regulate safe conduct to prevent accidents that they would be liable for. 10. Question of scope of employment is generally a question for the jury. 11. Also applies to intentional torts of employees. B. Independent Contractors 1. General rule is that employer is not vicariously liable for torts of independent contractors. 2. The key is whether employer has right to control the physical details of the work. If so, employer may be liable. 3. Determination is very fact specific i. Where was person located? ii. To what extent did company regulate contractor’s activities? iii. Was worker paid on time basis? Lump sum or per piece is sign of a contractor. iv. Who supplied tools and equipment to do the job? 4. The mere fact that someone is called an “independent contractor” is not dispositive. Torts II – Spring 2003 Professor Timmons Page 12 5. Even if the person is an independent contractor, an employer may be directly negligent in hiring, training, etc. 6. Exception to general rule of no vicarious liability for independent contractors i. If you hire an independent contractor to perform a non-delegable duty and they perform negligently, owner is still liable. ii. Non-delegable duties a. Inherently dangerous activities 1) Activity involving a peculiar risk of harm that calls for more than ordinary caution. i) Example is repairing windows in a tall building. ii) Owner will be vicariously liable for contractor’s negligence. iii) Owner not liable for non-peculiar risks. Example is a board left on sidewalk while repairing windows in a tall building. iv) No vicarious liability for negligence not related to peculiar risk or special danger of the work. C. Joint Enterprise 1. Vicarious liability may be imposed on those engaged in a joint venture or enterprise. 2. Joint enterprise – agreement (express or implied) to act with a common purpose to advance their pecuniary interest and an equal right to a voice in the direction of the enterprise. 3. Joint Enterprise Elements i. Express or implied agreement among members ii. A common purpose iii. A common pecuniary interest iv. An equal right of control. 4. Joint enterprise must be concerned with a shared commercial or profit motive. Will not find JE in family setting. 5. In order for joint enterprise to be liable, the activity causing the injury must be in furtherance of purposes of joint enterprise. D. Bailments 1. General Rule – A bailment does not make a bailor vicariously liable for the acts of the bailee in using the chattel. 2. There still can be direct negligence on the part of the bailor. This is called negligent entrustment. 3. Some states have statutes that vary general rule with regard to automobiles. i. Owner consent statutes – owner of car will be vicariously liable for negligent acts of driver when they consent to use. a. Some states will even imply consent. b. Lack of consent would be found if car was being driven without permission OR subpermitee has converted or stolen the car. ii. Need for this has diminished with use of Omnibus Clauses in insurance policies that allow insurance to go with the vehicle. VI. Strict Liability Torts II – Spring 2003 Professor Timmons Page 13 A. Strict liability imposes liability on a defendant even though the defendant neither intentionally acted nor failed to live up to the objective standard of reasonable care. B. Strict liability is not absolute liability. C. Contributory negligence is not a defense to strict liability. 1. Rationale is to hold defendant fully liable for the risk. D. Implied Assumption of Risk is a defense to strict liability 1. Must show that plaintiff had subjective knowledge of a risk and assumed this risk. E. Policy rationale for strict liability is that the defendant’s enterprise is required to pay its way by compensating for the harm it causes because of its special, abnormal, or dangerous character. F. Categories of Strict Liability 1. Animals i. Wild Animals a. Owners/possessors of non-domesticated animals are liable if they injure someone. ii. Domesticated Animals a. Owners/possessors of domesticated animals are liable if they know or should know animal has dangerous propensities abnormal to its class. iii. Barnyard Animals a. Owners/possessors are liable for trespass of animals. b. Some jurisdictions in the U.S. have modified liability. 1) “Fencing In” Statutes – if animal is not fenced in and trespasses, there is strict liability. 2) “Fencing Out” Statutes – plaintiffs must fence out animals in order to recover under strict liability. iv. Judge, not jury, determines whether animal is wild, domestic, or barnyard. 2. Abnormally Dangerous Activities i. One who brings something non-natural that is unusual and dangerous onto land is liable for damages arising from its escape. ii. Non-natural is evaluated by looking at use of surrounding area and the character of the object. iii. Restatement (Second) of Torts §519 a. One who carries on an abnormally dangerous activity is strictly liable for the harm caused by the activity. iv. Six factors for abnormally dangerous activities (Restatement §520) a. Existence of a high degree of risk of some harm. b. Likelihood that the resulting harm will be great. c. Inability to eliminate the risk by exercise of reasonable care. d. Extent to which activity is not a matter of common usage. 1) Common usage is when a significant amount of public takes part in activity. e. Inappropriateness of activity to place where it is carried out. f. Extent to which activity’s value to the community is outweighed by its dangerous attributes. Torts II – Spring 2003 Professor Timmons Page 14 v. Typically, will need to meet several of the factors to establish that an activity is abnormally dangerous. vi. Judge, not jury, determines whether activity is abnormally dangerous. G. Limitations on Strict Liability 1. Proximate Cause i. Under strict liability, liability is only imposed for those injuries resulting as the natural consequence of that which makes the activity abnormally dangerous. a. Blasting is not the proximate cause of dead mink kittens – blasting is the proximate cause of property damage. ii. Proximate Cause Limitations a. Scope of Consequences for 1) Intentional Torts [------------------] Broad 2) Negligence [------------] Medium 3) Strict Liability [-------] Narrow iii. If a proximate cause argument fails in strict liability action, it DOES NOT mean it will fail in a negligence action. 2. Intervening Causes i. Acts of God or other unforeseen or unexpected acts destroy proximate cause for strict liability actions. ii. Restatement view is contrary – allows strict liability even when there is an unforeseen or unexpected intervening act. Intentional act WOULD destroy proximate cause under Restatement. VII. Products Liability A. Liability of manufacturer or seller of chattels to one with whom he is not in privity of contract, who suffers physical harm caused by the chattel. B. Liability for injury should not turn on privity of contract in order for defendant to be liable for plaintiff’s injuries – MacPherson v. Buick Motor Co. C. Almost all products liability claims contain both negligence and strict liability. 1. Reason is that showing negligence shows that defendant actually did something wrong. This can have an impact on juries and their subsequent awards. 2. Punitive damages may be awarded for products liability but it must be shown that defendant actually did something wrong. D. Express Warranty/Innocent Misrepresentation liability 1. Elements i. Specific representations a. Trend is toward more general representations. ii. Reasonable reliance a. Trend is toward objective (reasonable person). iii. Representation was false iv. Breach of representation caused injury. 2. Privity of contract not required. Manufacturer can be liable to end consumer for misrepresentations that cause injury. E. Implied Warranty 1. When an object is used for what it is designed, there is an implied warranty that the product will be safe. Torts II – Spring 2003 Professor Timmons Page 15 2. Privity of contract is not required. 3. Rationale is that burden of injury should be borne by those able to control the defect or pass costs along in the product. F. Strict Liability 1. A manufacturer is strictly liable in tort when an article he places on the market knowing that it is to be used without inspection for defects, proves to have a defect that causes injury to a human being. 2. Accepted by most jurisdictions. 3. Adopted by Restatement (Second) of Torts §402A – Special Liability of Seller for Physical Harm to User or Consumer i. (1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if a. (a) the seller is engaged in the business of selling such a product, and b. (b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold. ii. (2) The rule stated in Subsection (1) applies although a. (a) the seller has exercised all possible care in the preparation and sale of his product, and b. (b) the user or consumer has not bought the product from or entered into any contractual relation with the seller. 4. Rationale for strict liability i. Cost for injuries should be born by manufacturers of defective products. ii. Physical injury from defective products should be governed by tort law. 5. Must show that product was defective. 6. Generally stated that to recover under strict products liability theory, plaintiff must show i. The product was in defective condition when it left the manufacturer. ii. No substantial change in condition. iii. Defective condition proximately causes plaintiff’s injury. G. Three types of product defects – Used by Restatement (Third) of Torts 1. Manufacturing defect i. Flaw in the product that makes it not like the rest of the products in the line. ii. Quality control problem. iii. Plaintiff must prove a. Manufacturer made and sold a product in defective condition. b. The defective product reached the ultimate consumer without a substantial change in its condition. c. The defective condition caused plaintiff’s injuries. iv. Essentially, this is strict liability for manufacturing defects. v. Rationales a. Difficult to prove the actual manufacturing defect. b. Manufacturers who produce defective products should bear the cost. Torts II – Spring 2003 Professor Timmons Page 16 c. Encourages improvement of manufacturing processes. d. Drives unsafe products and manufacturers out of business. 2. Design defect i. A defect attributable to failure of design of entire product line. ii. Uses negligence analysis to determine liability of manufacturer. iii. Manufacturers must take reasonable care in light of any reasonably foreseeable use of the product which might cause harm or injury. iv. Rationale for using negligence analysis: a. Easier to prove design defects than manufacturing defects. b. Incentives are greater under negligence analysis because careful manufacturer is rewarded. c. Higher threshold of proving fault under negligence is appropriate for an action that could affect entire product line. d. Rewards careful manufacturers and deters careless manufacturers. v. Tests for establishing negligence a. Consumer Expectations test 1) Did the safety of the product conform to the reasonable expectations of the reasonable consumer? 2) Minority rule. 3) Some courts use as a factor in Risk/Utility test. 4) Disadvantages i) Hard to determine reasonable expectations for safety. ii) Might be too broad and impose liability where it really should not be. iii) Might also be too narrow. 5) Advantages i) Easier for juries to understand and apply. b. Risk/Utility test 1) Courts attempt to balance risks against utility of the product. 2) Factors i) The usefulness and desirability of the product – its utility to the user and to the public as a whole. ii) The safety aspects of the product – the likelihood that it will cause injury, and the probable seriousness of the injury. iii) The availability of a substitute product which would meet the same need and not be as unsafe. iv) The manufacturer’s ability to eliminate the unsafe character of the product without impairing its usefulness or making it too expensive to maintain its utility. v) The user’s ability to avoid danger by the exercise of care in the use of the product. vi) The user’s anticipated awareness of the dangers inherent in the product and their avoidability, Torts II – Spring 2003 Professor Timmons Page 17 because of general public knowledge of the obvious condition of the product, or of the existence of suitable warnings or instructions. vii) The feasibility, on the part of the manufacturer, of spreading the loss by setting the price of the product or carrying liability insurance. 3) Similar to negligence analysis. 4) Difference is that risk/utility test focuses on product, as opposed to manufacturer’s conduct as in negligence. vi. Most jurisdictions require that the plaintiff prove an alternative feasible design in order to prove design defect. vii. State of the Art Evidence a. Most jurisdictions allow evidence that product was state of the art at time it was made. b. Two views 1) What was technologically available at time product was made. 2) What was practical from economic perspective. viii. Open and Obvious Danger a. Some courts indicate this is an absolute defense in design defect cases. b. Most courts indicate that it is but one factor in the risk utility analysis. 3. Warning defect i. Manufacturer failed to warn of potential product defects. ii. Good warnings a. Get user’s attention b. Explain hazards c. Show user how to avoid hazards iii. Too many warnings dilute the effect of true warnings. iv. Warnings are not a substitute for a reasonably safe design. v. Three possible uses for warnings a. When a product is unavoidably dangerous, a warning allows a user to make a decision to use the product or not. b. When a product has a danger that is avoidable, a warning will permit user to use product in a safe manner. c. When a product is unavoidably dangerous if used inappropriately, a warning will not excuse defective design. vi. Warnings essentially allow manufacturer to show implied assumption of risk – Plaintiff voluntarily assumed a known risk. vii. The warning defect theory of products liability may be more rooted in negligence theory because focus is on manufacturer’s conduct. viii. For negligence action, the question is whether reasonably prudent manufacturer would have warned. ix. For strict liability, the question is whether manufacturer failed to warn of a risk that was known or knowable at the time of manufacture. Torts II – Spring 2003 Professor Timmons Page 18 x. In addition to duty to warn at time of sale, many courts impose a duty to warn of dangers that become known post-sale. xi. Learned Intermediary rule a. Pharmaceutical manufacturer should provide warnings to doctor and not patients because doctor can more adequately apprise patient of potential dangers. xii. Most courts have found no duty to warn of obvious dangers or of risks that are generally known. xiii. Most jurisdictions allow a presumption that warning will be read and heeded. Defendant is able to rebut this presumption to destroy causation. H. Proof for Products Liability 1. Plaintiff must show i. That the product that injured the plaintiff was manufactured by the defendant. ii. That the product was defective and plaintiff was injured as a result of the defect. iii. That the defect existed when it was sold by the defendant. 2. For misuse to bar a claim, it must be unforeseeable misuse. 3. Most courts do not allow evidence of a product re-design. i. Rationale is that if this evidence was allowed, it would discourage manufacturers from making changes to design that improved product. 4. Expert testimony is necessary to prove many of issues. 5. Would want to obtain evidence of contributory negligence or assumption of risk. 6. As defendant, would want to rebut presumption that plaintiff read warning in warning defect cases. 7. Manufacturers would want to show that injury was not caused by the defect identified. 8. Even though res ipsa loquitur does not apply in strict liability, the inferences at core of the doctrine can give rise to an inference that product was defective and defect existed when product left the manufacturer. I. Defenses for Products Liability 1. Plaintiff’s Conduct i. Most courts apply comparative negligence principles in strict products liability actions. ii. Most courts also apply assumption of risk and do not completely bar recovery. iii. Some courts hold that when a plaintiff voluntarily confronts a known hazard, there is assumption of risk and the claim is barred. iv. Unforeseeable misuse bars recovery; foreseeable misuse does not bar recovery. 2. Preemption and Other Government Actions i. Preemption comes from the Supremacy Clause ii. Congress can enact federal statutes that override state tort laws iii. State tort law can be preempted in three ways (at minimum, one way must be present for pre-emption.) Torts II – Spring 2003 Professor Timmons Page 19 a. Express -Congress saying in a federal statute that this statute preempts all state law in this area; b. Conflict -this statute overrides any state laws that conflict with this law; c. Occupy the Field -federal statutes occupy the field comprehensively in a particular area. iv. When trying to determine if there is preemption, must ask what was Congress’ purpose? The courts do not want to find for preemption in areas that have traditionally been state law areas like tort law. J. Defendants Other than Principal Manufacturers/Harm Other than Personal Injury 1. Other Suppliers of Chattels i. Retailers and Wholesalers are subject to strict products liability a. Rationale 1) These parties are in a position to exert pressure on manufacturer to improve products. 2) This allows other parties to be available to plaintiff to compensate for injury. ii. Sellers of used products are not subject to strict liability for product defects. iii. Those who sell products where sale is incidental to providing a service are not subject to strict liability for product defects. iv. Still would be liable under negligence theories. v. An occasional seller who does not hold himself out as having knowledge or skill in commercial sense, is not subject to strict liability. 2. Strict products liability generally does not apply to the providing of services – negligence does apply. 3. Harm other than personal injury i. Recoverable economic losses resulting from personal injury a. Lost wages b. Diminished earning capacity c. Loss of consortium ii. Economic losses that do no result from personal injury are typically not recoverable. a. Product did not perform as expected – no recovery. b. When product itself is damaged or destroyed, most courts treat this as an economic loss not recoverable in tort. Some courts allow recovery. VIII. Defamation A. Defamation is the broad term that encompasses both slander and libel. B. Slander – Oral defamation. C. Libel – Written defamation. D. Defamation actions protect the interests of a person’s reputation. E. Requirements for a Defamation cause of action 1. Defamatory Imputation i. A communication that harms the reputation of another. ii. If it tends to hold the person up to hatred, contempt, or ridicule, or cause him to be shunned or avoided. Torts II – Spring 2003 Professor Timmons Page 20 iii. Only if there is one meaning that is NOT defamatory can the trial court dismiss the action as a matter of law. iv. The standard for determining whether a statement is NOT whether “right thinking” people think less of the person. v. The statement is defamatory if SOME people find statement defamatory, even if they are a minority position or “wrong thinking”. vi. Whether a statement is defamatory depends upon circumstances (time/place/situation). 2. False Statement i. Traditional common law rule was that truth was required to be proved by defendant. ii. In order to assert a defense of truth, it is only necessary to prove substantial truth. iii. Cannot prove specific truth as defense by showing general bad character. iv. Courts have recognized that true communications can be harmful and are sometimes actionable under tort of invasion of privacy. 3. Communication to a Third Party (Publication) i. Original publisher liable for repetition that might reasonably been anticipated. ii. The party repeating the defamation is liable for the publication even though he states the source or states that he does not believe it to be true. iii. Words are not required – gestures will suffice. iv. Elements of Publication a. Communication of defamatory imputation b. Seen by someone other than plaintiff c. Defamatory meaning understood by other party. v. If communication to third party is to qualify as a publication, it must be done intentionally or negligently. 4. About Plaintiff i. Where the group or class libeled is large, none can sue even though the language used is exclusive to the group. ii. “Intensity of the Suspicion” is a factor in determining whether group can have cause of action. iii. Test is whether a reasonable person would understand the defamed person to be the plaintiff. iv. It is enough for even one reasonable person to recognize plaintiff. v. The fewer people having knowledge would lower damages. F. Dead people cannot be defamed – cause of action only applies to living persons. G. Corporations can be defamed if it results in harm to reputation of corporation. H. Statements indicating that work is fiction do NOT rule out defamation action. I. Libel 1. Written 2. General rule is that broadcasts are considered libel, even if unscripted. 3. In libel actions, damages/loss is presumed. J. Slander 1. Oral 2. Special damages are required to recover for slander. Torts II – Spring 2003 Professor Timmons Page 21 i. Special damages are those that flow from harm to reputation caused by the slander. ii. Loss of business, divorce, etc. as a result of slander are examples. 3. Slander per se – slander that is actionable without showing of special damages i. Imputations of major crime ii. Loathsome disease iii. Defamation affects business, trade, profession, or office iv. Serious sexual misconduct K. The publication of a book, periodical, or newspaper containing defamatory matter gives rise to but one cause of action for libel, which accrues at the time of the original publication, and that the statute of limitations runs from that date. 1. Each edition of a newspaper, magazine, or book is held to be one separate publication. 2. Also applies to broadcast and rebroadcast of radio or television shows. L. Basis of Liability 1. Public Officials i. A public official cannot recover damages for a defamatory statement as to their conduct unless he can prove actual malice. ii. Actual malice a. Knowledge of the falsity of the statement or reckless disregard for whether the statement was false. b. Plaintiff must show that the defendant entertained serious doubts as to the truth of his publication. c. Not enough to show that defendant was negligent in determining truth of statement. d. Spectrum [Negligence---------------------Reckless-----Knowledge] – Recklessness is closer to knowledge than negligence. iii. Having to show actual malice acts to protect free speech because it is a buffer that limits liability for erroneous publications. 2. Alteration of Statements i. If an author alters a speaker’s words but does NOT effect a material change in meaning, the speaker suffers no injury to reputation and there is no actual malice. ii. Author must materially alter the meaning to be actual malice. iii. This is a question of law for the judge – not the jury. 3. Common Law Reporter’s Privilege i. Unless there is a privilege, a person who repeats a defamatory statement is liable for defamation. ii. Reporter’s exception provides a reporter with a privilege to report all official proceedings in the public interest, republication of public reports filed by public officials, and information of public concern uttered at public meetings. iii. At common law, the privilege was lost when the report was not verbatim or an accurate summary. 4. Private Individuals i. Do not have to prove actual malice for defamation. Torts II – Spring 2003 Professor Timmons Page 22 ii. States may not permit punitive or presumptive damages to be awarded to private individuals for defamation UNLESS actual malice is shown. 5. Summary of Constitutional Limits i. Public Figure or Official/Speech is Matter of Public Concern a. Level of Fault = Actual Malice b. Burden of Proving Falsity = Plaintiff c. Damages (Presumed/Punitive) = Yes – Presumed & Punitive ii. Private Figure/Speech is Matter of Public Concern a. Level of Fault = Negligence b. Burden of Proving Falsity = Plaintiff if Defendant is Media/Unknown if Defendant is Non-Media c. Damages (Presumed/Punitive) = Yes, if Actual Malice is Proved iii. Private Figure/Speech is of Private Concern a. Level of Fault = Negligence or Strict Liability – Don’t Really Know b. Burden of Proving Falsity = Unknown c. Damages (Presumed/Punitive) = Yes, Do Not Have to Prove Actual Malice 6. Public Figures versus Public Officials i. Public Figures a. Universal -person must enjoy pervasive power and influence or pervasive fame/notoriety in public affairs. b. Limited -only public figures with respect to some specific controversy/set of events 1) Must be evidence that plaintiff voluntarily drew herself in or attempted to influence the outcome of the controversy (i.e. self-defense). ii. Public Officials a. Persons with substantial responsibility for or control over conduct of governmental affairs—all elected officials. b. Even some non-elected people are public officials. c. Debatable whether policemen/teachers, etc. are public officials. 7. Opinion i. U.S. Supreme Court has said that opinions are not absolutely protected from defamation actions. ii. Only opinion statements that reasonably imply an assertion of objective fact are actionable. iii. Statement must be proven as false in order for an action in defamation. M. Privileges to Defamation 1. Absolute Privileges i. Judicial Privilege a. Must have some relation to case being tried. b. Judges, attorneys, and witnesses are covered by privilege ii. Legislative Privilege a. Legislators and witnesses are covered. b. Majority view is that this extends down to municipal level. Torts II – Spring 2003 Professor Timmons Page 23 iii. Federal Officials Privilege a. Statements made by officials are immune from defamation actions. b. Only applies to some top-level officials. iv. State Officials Privilege a. Same as for federal officials. 2. Conditional or Qualified Privilege i. Where there is a common interest in subject matter of speech or there is a (moral or social) duty with respect to the speech, there is a conditional privilege. ii. Where a former employer communicates to the new or prospective employer, a conditional privilege arises from a discharge of duty owed to the prospective employer. iii. Privilege can be lost a. Factors 1) The defendant’s reasonable belief in the truth of his statements; 2) The excessive nature of the language used; 3) Whether the disclosures were unsolicited; and 4) Whether the communication was made in a proper manner and only to proper parties. b. Generally, it is held that a defendant loses privilege when they 1) Act with malice – knowingly false or reckless disregard 2) Improper purpose for the communication 3) Excessive publication IX. Invasion of Privacy A. The right of a private individual to be let alone and protected from unauthorized publicity in essentially private matters. B. Four torts covered under general umbrella of invasion of privacy 1. Appropriation of Name, Likeness, or Identity for Commercial Purposes i. Unauthorized use of one’s name, likeness, or identity for commercial purposes gives rise to an action for invasion of privacy. ii. Interest protected is dignity. iii. Reporting of newsworthy or other matters of public concern are not an appropriation that can result in liability. iv. Most of the time, this tort arises with respect to advertising. v. Scope of this tort is extremely controversial. 2. Intrusion Upon Seclusion i. Elements a. Intrusion must be into a private place, conversation, or matter where there is a reasonable expectation of privacy. b. Intrusion must be highly offensive to the reasonable person. ii. For this type of invasion of privacy, publication is not required. iii. No intrusion if done in a public place where there is no reasonable expectation of privacy. iv. Becoming important in employment arena. 3. Public Disclosure of Private Facts Torts II – Spring 2003 Professor Timmons Page 24 i. Elements at common law a. Public disclosure b. Private facts c. Highly offensive to the reasonable person ii. Majority of courts have added fourth element a. That the matter is not newsworthy or a matter of public concern. iii. Additional element limits the applicability because the tort could be in conflict with 1st Amendment iv. Truthful, accurate publishing of matters of public record are not actionable for invasion of privacy. v. Differs from defamation in two major ways a. Defamation is a communication of false statements – this is about communication of true statements. b. Defamation does not have to be published to public at large – this tort requires public disclosure. vi. In some arenas, if there is a special relationship with group to whom fact is publicized, this can qualify as public disclosure. vii. Subset of this tort is tort of Breach of Confidence a. If you make a promise not to disclose private information, you can be liable for breaching this promise. b. Must show that there was a relationship between the parties that imposes a duty of non-disclosure. c. Promise can be express or implied. 4. False Light Invasion of Privacy i. Elements a. Defendant publicized a matter about plaintiff to public. b. Must have put plaintiff in a false light. c. False light is highly offensive to the reasonable person. ii. Different from defamation because a. False light requires publicity to substantial number of people. b. Defamation requires a harm to reputation – this tort requires it to be highly offensive to a reasonable person. iii. Standard of care a. Plaintiff must prove defendant knew statement was false or reckless disregard for the truth. iv. At least 20 states recognize expressly; seven states reject tort. v. Public figures cannot recover for intentional infliction of emotional distress due to an allegedly defamatory act unless the plaintiff can show false statement and actual malice. a. Court does not want speech “chilled” by potential liability for IIED as applied to public figures. X. Misrepresentation A. Bare non-disclosure is not actionable for misrepresentation. 1. Generally, there must be some misrepresentation of facts. 2. Exceptions to rule of “No Duty to Disclose” i. Confidential or fiduciary relationship between parties. ii. When plaintiff seeks equitable relief. Torts II – Spring 2003 Professor Timmons Page 25 iii. Contracts requiring good faith and fair dealing. B. Active concealment may constitute an act sufficient to base liability. C. Concealment Rules 1. Jenkins Rule i. Where a vendor has knowledge of a defect in property which is not within the fair and reasonable reach of the vendee and which he could not discover by the exercise of reasonable diligence, silence and failure of the vendor to disclose the defect in the property constitutes actionable fraudulent concealment. 2. Restatement (Second) of Torts § 551 – Liability for Non-Disclosure i. (1) One who fails to disclose to another a fact that he knows may justifiably induce the other to act or refrain from acting in a business transaction is subject to the same liability to the other as though he had represented the nonexistence of the matter that he has failed to disclose, if, but only if, he is under a duty to the other to exercise reasonable care to disclose the matter in question. ii. (2) One party to a business transaction is under a duty to exercise reasonable care to disclose to the other before the transaction is consummated, a. (a) matters known to him that the other is entitled to know because of a fiduciary or other similar relation of trust and confidence between them; and b. (b) matters known to him that he knows to be necessary to prevent his partial or ambiguous statement of the facts from being misleading; and c. (c) subsequently acquired information that he knows will make untrue or misleading a previous representation that when made was true or believed to be so; and d. (d) the falsity of a representation not made with the expectation that it would be acted upon, if he subsequently learns that the other is about to act in reliance upon it in a transaction with him; and e. (e) facts basic to the transaction, if he knows that the other is about to enter into it under a mistake as to them, and that the other, because of the relationship between them, the customs of the trade or other objective circumstances, would reasonably expect a disclosure of those facts. iii. Majority Rule D. Elements of Misrepresentation 1. Intentional misrepresentation of fact 2. Misrepresentation of fact must be material. 3. Misrepresentation must be intended to induce reliance by the plaintiff. 4. Misrepresentation must actually induce reasonable reliance by the plaintiff. 5. Misrepresentation must have proximately caused pecuniary harm to the plaintiff. E. Fraudulent Misrepresentation 1. Must be intentional Torts II – Spring 2003 Professor Timmons Page 26 2. Must prove defendant made representation knowing it was not true. 3. Honest belief in truth of statement bars an action for misrepresentation. 4. Scope of liability for intentional or fraudulent misrepresentation is expanded to include those persons defendant has reason to expect will rely on the misrepresentation. i. Restatement § 531 a. One who makes a fraudulent misrepresentation is subject to liability to the persons or class of persons whom he intends or has reason to expect to act or to refrain from action in reliance upon the misrepresentation, for pecuniary loss suffered by them through their justifiable reliance in the type of transaction in which he intends or has reason to expect their conduct to be influenced. F. Negligent Misrepresentation 1. Plaintiff must prove i. Knowledge that information was desired for a serious business purpose or that there is a business relationship between parties. ii. Knowledge that plaintiff will rely and be injured if information is wrong. iii. Defendant had advantage in ascertaining the truth of the information. 2. Restatement View of Negligent Misrepresentation i. One who in the course of business, profession, or employment, or in any other transaction in which he has a pecuniary interest supplies false information for the guidance of others in their business transactions is subject to liability for pecuniary loss caused to them by their justifiable reliance on the information if he fails to use reasonable care in obtaining or communicating the information. 3. Liability to Third Party i. Three Approaches a. New York Rule – Strictest Approach 1) Must be a special relationship approaching privity. i) Must have been aware that information was for a specific purpose. ii) In furtherance a known party or parties was intended to rely. iii) Some conduct between plaintiff and defendant indicates reliance. b. General Foreseeability – Broadest Approach 1) Scope of liability for negligent misrepresentation is to all those who foreseeably rely on information. c. Middle Ground – Restatement Approach 1) Under this approach, defendant is not liable to all foreseeable parties. 2) Defendant faces liability to a limited group of persons. G. Misrepresentations Causing Physical Injury 1. Usually addressed under negligence theory. 2. Courts have held that publishers have no duty to determine the accuracy of the books they publish. Torts II – Spring 2003 Professor Timmons Page 27 3. When publisher represents to the public that they possess superior knowledge and special information concerning products they endorse, they can be held liable for damages arising from misrepresentation. H. Innocent Misrepresentations 1. Minority Rule i. An innocent misrepresentation may be actionable if the declarant has the means of knowing, ought to know, or has the duty of knowing the truth. ii. Adopted by the Restatement -§ 552C Misrepresentation In Sale, Rental Or Exchange Transaction a. (1) One who, in a sale, rental or exchange transaction with another, makes a misrepresentation of a material fact for the purpose of inducing the other to act or to refrain from acting in reliance upon it, is subject to liability to the other for pecuniary loss caused to him by his justifiable reliance upon the misrepresentation, even though it is not made fraudulently or negligently. b. (2) Damages recoverable under the rule stated in this section are limited to the difference between the value of what the other has parted with and the value of what he has received in the transaction. c. Caveat 1) The Institute expresses no opinion as to whether there may be other types of business transactions, in addition to those of sale, rental and exchange, in which strict liability may be imposed for innocent misrepresentation under the conditions stated in this Section. iii. Limited to sale, rental, or exchange transaction and damages are limited to restitution. 2. In most jurisdictions, unless plaintiff can show a lack of due care, they cannot recover. I. Reliance 1. Required element of every misrepresentation claim. 2. Must be reasonable or justifiable. 3. Majority of courts now hold that the plaintiff has no duty to make inquiry or investigation as to the truth of an apparently reliable statement made to him. This is true even if the investigation could be made quickly, with little effort, by means readily at hand. J. Opinion 1. General rule is that plaintiff cannot recover for statements of opinion. 2. Rationale is that there cannot be a reasonable basis for reliance. 3. Exceptions to general rule i. Opinions of experts ii. Opinions of those in a fiduciary relationship K. Misstatements of the Law 1. General rule is that misrepresentation claims cannot be based on misstatements of the law. 2. Rationale Torts II – Spring 2003 Professor Timmons Page 28 i. Everyone is supposed to know the law. 3. Exceptions i. If statement is a statement of fact about the law, it could be basis for misrepresentation claim. a. Must be materially false. b. Must have made statement knowing it was false. 4. Where statements look more like statements about opinions of legal consequences, they are likely not actionable. L. Representations of Future Events 1. Generally, a misrepresentations claim cannot be based on representations about future events. 2. Exception i. If person making representation knows it to be false, it may be actionable. M. Damages for Misrepresentation 1. Fraudulent Misrepresentation i. Most courts will allow expectation (benefit of bargain) damages. ii. Some courts will allow only recovery of out of pocket costs. iii. Some courts will allow plaintiff to choose between two above if they can show with certainty. iv. Courts will allow consequential damages as long as they can be shown with reasonable certainty. v. Punitive damages are recoverable if conduct was sufficiently willful or wanton. 2. Innocent or Negligent Misrepresentation i. Courts typically only allow out of pocket costs. 3. Generally, cannot recover for emotional distress resulting from misrepresentations.