Damages & Insurance Flashcards
Compensatory Damages
Compensatory damages include past and future pecuniary and non-pecuniary harm. Pecuniary harm includes losses such as medical expenses, loss of income, and discounted present value of future income. Non-pecuniary harm includes a lump-sum amount for past and future pain and suffering. The plaintiff must have some level of awareness or consciousness to recover for pain and suffering. In most states, pain and suffering includes loss of enjoyment of life.
Survival Action
A “survival action” allows the estate of a deceased victim to recover for any injuries the victim suffered up to the time of death. A “wrongful death” action allows their heirs or beneficiaries to recover damages they have suffered as a result of the victim’s death. In many states, this includes damages for loss of consortium.
Punitive Damages
In cases involving intentional harm or reckless conduct, a jury may award punitive damages “for the sake of example” to deter similar behavior and to punish the defendant. Punitive damages may be awarded for conduct which is intended to cause injury, or despicable conduct which is engaged in with a willful and conscious disregard of the rights or safety of others. If a punitive damage award is grossly excessive, it constitutes an arbitrary deprivation of property without fair notice under the Due Process Clause.
Insurance (Broad)
The purpose of insurance is to protect the insured against the adverse financial consequence of an unpredictable event First-party insurance such as life insurance and medical insurance pays benefits to the insured. Third-party insurance (or liability insurance) pays benefits in the event the insured is sued by another or is held liable to another as the result of a lawsuit.
Collateral Source Rule
Collateral source rule is a rule of evidence and a rule of damages. The rule precludes a defendant from introducing evidence that some or all of the plaintiff’s damages have been paid by someone other than the defendant(s) and from reducing or offsetting the judgment by any amounts that were received by the plaintiff from sources other than the defendant(s). As a result of the collateral source rule, the plaintiff is entitled to recover the full amounts of his/her reasonable medical expenses and lost wages, even if those were paid by insurance or by anyone other than the defendant or another tortfeasor.
Subrogation
Most insurance contracts will contain a subrogation clause that allows the insurer to succeed to the insured’s rights against a third party tortfeasor, and to approve of or participate in a settlement. Absent a contract, common law subrogation arises automatically for insurance payments for property damage, but does NOT arise automatically for insurance payments for personal injury. Where it operates, subrogation prevents double recovery to the plaintiff.
Motor Vehicle Liability
Under the family purpose doctrine, the owner of a car may be held vicariously liable for the torts of anyone using the car for a “family purpose”. Under the joint enterprise doctrine, each member of a group venture is vicariously liable for the torts of the group’s driver.
Covenant of Good Faith
Every contract is deemed to contain an implied covenant of “good faith and fair dealing”. An insurance company breaches the implied covenant of good faith if it acts in “gross disregard” of its insured’s interests where it acts with a deliberate or reckless failure to place the insured’s interests on an equal footing with its own interests. Ordinary negligence, such as mistaken judgment or administrative delay, does not constitute “bad faith” or “gross disregard”.
