torts 2 deck 9 insurance Flashcards
Ambiguities
The rule (from contract law): Ambiguities are construed against the drafter (the insurance company).
The Issue
The policies required the insurance companies to defend their insured in claims that are covered under the policies.
Is this claim covered?
How can we tell?
The “eight corners rule”
“If the pleading contains allegations that, when fairly and reasonably construed, state a cause of action that is potentially covered by the policy, then the insurer has a duty to defend the insured in the underlying lawsuit.”
Extent of Duty to Defend
Does insurer have to defend claims that would be not be covered under the policy?
The scope of the defense obligation extends to all claims, not only the valid or strong ones.
Obligation to Settle in Good Faith
Where does the money come from?
Insurer pays its $10,000
Landlord left to come up with the remaining $91,000.
Transferred to tenant her right to sue the insurer.
Who should pay the $91,000?
An insurer should not be permitted to further its own interests by rejecting opportunities to settle within the policy limits unless it is also willing to absorb losses which may result from its failure to settle.
Always?
At least here, where the defendant “knew that there was a considerable risk of substantial recovery beyond said policy limits.”
Rules for Interpreting an Insurance Contract
Ambiguities are construed against the drafter
Here, in favor of the insured
Ordinary and common usage
Language should be given its plain and ordinary meaning
Avoid redundancy
Each word has its own meaning
No-Fault Systems
workers comp
Liability without fault
Is a “no-fault” system the same as a strict liability system?
No, because . . .
Defenses based on Plaintiff’s conduct are abolished or restricted
Employers are liable for injuries “arising out of and in the course of employment.”
Do not need a causal link between a particular act of defendant employer and employee’s harm.
Liability without fault
Is a “no-fault” system the same as a strict liability system?
No, because . . .
Defenses based on Plaintiff’s conduct are abolished or restricted
Employers are liable for injuries “arising out of and in the course of employment.”
Do not need a causal link between a particular act of defendant employer and employee’s harm.
workers comp
An “exclusive” remedy
Employees may not sue an employer in court.
Administrative scheme provides the exclusive remedy.
Benefits Under A Workers’ Compensation Scheme, p. 894
Lost earnings and medical expenses
Limitations
Injury that does not affect ability to earn is not compensable
Pain and suffering not compensable
Mental distress damages are compensable.
Punitive damages not compensable
Statutes impose strict limitations on the amount of compensation recoverable
Loss defined in terms of “average weekly wage”—subject to minimums and maximums
Look at individual statutes
The Scope of Coverage
Clodgo v. Industry Rentavision, Inc. (Vt. 1997), p. 883 The case of the firing staple gun A guy is hurt while at work What can he do? What does he have to show?
Scope of Coverage (2)
Workers’ compensation benefits may be awarded for injuries “arising out of and in the course of” employment. What does this mean? Are there two separate elements? “arising out of” “in the course of”?
How do we determine?
What is “arising out of” employment?
What is the cause and origin of the injury?
Is the person at work?
Is he performing work activities?
What is “in the course of employment”?
Look at the time, place, and circumstances of the injury.
Did it occur within the period of time the employee is at work?
Was the employee fulfilling his/her job duties?
“Arising out of and in the course of employment”
Where does horseplay fit in?
Commission held that claimant could recover.
What would support this decision?
That injury arose out of and in the course of employment.
Does the court agree?
“Arising out of and in the course of employment”
Miedema v. Dial Corp. (Iowa 1996), note 1, p. 885
An employee strained his back after making a trip to the employer’s restroom while getting ready for work
Injury occurred “in the course of employment”
But
The injury did not “arise out of his employment.”
Neither the design of the restroom nor of the toilet Dial provided for its employees contributed to his injury.
“Arising out of and in the course of employment”
Falling to his death while steeling copper downspouts?
Getting attacked by a third party while working?
If employee is trying to prevent theft, even thought that is not explicitly part of his job?
Acts of God
ElectroVoice, Inc. v. O’Dell (Tenn. 1975), note 6, p. 888
Employee suffered a violent allergic reaction after eing stung by a bee while working on an assembly line.
Evidence that bees often entered the building
The walls had been treated twice in the past two years in order to kill the bees that lived in them.
The conditions in the plant “increased the risk or hazard” of suffering bee stings, so the injury “arose out of” her employment.
Contrast Connor v. City of Danville (Va. 2019), note 6, p. 888
Employee of the police department slipped on wet grass while trying to find shelter from a storm after she had spent some time on a porch interviewing a potential suspect.
Injury was “not caused by an actual risk of her employment” because she had finished the interview and was trying to “get out of the weather.”
An employee’s willful misconduct
Van Vleet v. Montana Ass’n of Counties Workers’ Compensation Trust (Mont. 2004), note 7, p. 889
Compensation allowed for injury suffered from drinking after hours,
if the employee started to drink during work hours and the afterhours drinking
did not constitute a “substantial deviation” from the drinking while on the job.
Beyond accidents
Johannesen v. New York City Department of Housing Preservation and Development (NY 1994), note 9, p. 889
The claimant suffered two sudden asthmatic attacks at work
After being exposed to high levels of secondhand smoke in a closed work environment.
Injuries were “accidental” and therefore covered by workers’ comp.
Stress
Kostamo v. Marquette Iron Mining Co. (Mich. 1979), note 9, p. 890
How does an employee prove that his heart disease or other illness was caused by work?
The timing of the cardiac episodes to the work experience,
The hot and dusty conditions of employment,
The repeated return to work after each episode,
The mental stress to which the worker was subjected.
The Going and Coming Rule
The “going and coming” rule provides that workers’ compensation does not ordinarily compensate injuries sustained while the employee travels to or from work.
“Additional Complications”
Hinojosa v. Workmen’s compensation Appeals Board (Cal 1972), note 1, p. 892
Farm laborer worked on noncontiguous ranches and was required to find his own transportation between ranches.
Compensation awarded, even though the employee was being driven home, because the employer “requires a special, different transit, means of transit, or use of a car for some particular reason of his own.”
