RiskProf

Torts: L'affaire de Coeur Edition

Man meets Woman.  Woman is married to Husband. Man and Woman run off and have an affair.  Husband successfully (it turns out) sues Man for the tort of alienation of affections.  Man is bummed and makes a claim against his homeowners policy.

Ok, should Man's insurance company, State Farm, cover the damage award?

TortsProf Blog has the details.

I wonder if the answer would be different in Mississippi?

Here is my analysis....

Under the policy State Farm was obligated to pay for a loss.  A loss was defined as an accident causing bodily injury or property damage.

While I have simplified the language somewhat (see case for actual contract language).  I believe that one can make the argument that because Man and Woman fell in love accidentally and this was the cause of Husband's bodily injury ( a broken heart).  Because State Farm (1) did not exclude this specific set of facts from coverage; and (2) because the contract is vague and ambiguous and written specifically so as to permit the State Farm to arbitrarily deny needed coverage to injured policyholders; and (3) because State Farm avoiding paying claims it knows it should pay; and (4) because State Farm is making money; and, finally, (5) because State Farm is suing the state AG we must interpret the contract in favor of the insured.  Ta da! 

Punitive damages for bad faith are likely, too, since State Farm is an out-of-state insurer.  Further, there is likely a conspiracy among all insurers not to pay similar claims.  Unfortunately, the McCarran-Ferguson Act (which was set up by the insurance industry to dupe the Congress into letting the states regulate insurance) allows the insurers to illegally contract, combine, and conspire in restraint of trade.  Finally and perhaps most importantly, State Farm was really mean to Sen. Lott.

The Language of the Law (Plaintiff's version))

I haven't read the briefs, but this AP report states that the Tuepkers are asserting in their appeal brief of their slab case that State Farm's contract language was "craftily ambiguous" and is "woven so as to not give away their true intent."  I love this.

Our fellow insurance blogger David Rosmmiller is also quoted in the ultimate paragraph saying the writing is on the wall.  I, however, am still glad that State Farm sends me my contract on paper.  I know I may have the option of obtaining it electronically, but I didn't know I could get it on the wall too!  David's real point is that we are now seeing a number of cases interpreting the contract as non-ambiguous.

By now everyone except Adam Scales, David Rossmiller and myself is likely tired of the ambiguity debate, but it has had real effects.  I heard from numerous sources that gulf coast redevelopment is stagnant.  People have money to rebuild, but they have difficulties in obtaining insurance and so there is little rebuilding.  The reason insurers won't provide is because of uncertainty about future liabilities.  If one can't write a certain contract, one won't write many contracts.  Hopefully, some of the certainty will be resolved.

Is this a Group Boycott?

The Sherman Antitrust Act prohibits combinations, contacts, and conspiracies in restraint of trade.  What if a trade association says its members will not deal with service providers unless the service providers contribute $2,500 each to defeat a candidate for governor?  Doesn’t this sound like a group boycott?

In this case the trade association is the California Applicants Attorneys Association (workers comp attorneys), the Service Providers are California physicians, and the Candidate for Governor is Arnold.

It sounds like the workers comp attorneys are putting their special interests ahead of their injured clients.  Say it isn’t so! Where is the California Attorney General on this?

via James Hamilton at Econbrowser.

Fewer Future Lawyers?

Walter and Ted seem to be doing an excellent job.

via Prof. Bainbridge

Convergence to efficient legal rules

Over at The Austrian Economist they are discussing Nicola Gennaioli and Andrei Shleifer working paper on "The Evolution of Precedent." The working paper examines Posner's famous hypothesis that common law converges to efficient legal rules.  Their punchline is that covergence occurs only under very special circumstances, but the evolution of precedent over time is on average beneficial under more plausible conditions.

Three Stories About Boy Scouts

Story 1:  At then end of every rank, a scout has to be reviewed by a panel of three adults to be promoted.  We ask the scouts questions about what they like and dislike about scouting to see if we can make the troop better.  We ask them questions about things they had to learn  (knots, cooking, putting up with Jimbo, etc.)  I asked a scout what he thought the toughest of the Scout Laws was (Trustworthy, loyal, helpful….).  He said bravery.  He then went on to explain how hard it was to be brave and how he was afraid he wouldn’t be brave when the time called for him to be brave.  He had thought about this and gave such an eloquent answer, it really impressed me.

Story 2: As part of the requirements for First Class Scout each scout has to meet with a lawyer, teacher, or some other important person in the community to talk about their rights and responsibilities as citizens.  I was the honorary important person.  I had a group of six scouts and we were talking about the value of lawyers.

Q:  Why do we have lawyers?  (We are talking about criminal law here)

A: To protect us.

Q:  To protect us from what?

A:  The MAN!

That was old even when I was a kid.  The MAN, sheesh.  The answering scout was my oldest sigma.  He must have learned his constitutional law from the Chicago 7.

Story 3:  The local council of the BSA has fudged its membership figures to obtain higher United Way donations. (AJC) Whatever happened to a Scout is Trustworthy?.  A Scout tells the truth. He is honest, and he keeps his promises. People can depend on him

Score one for "Old Europe"

While not related to risk or insurance George Wallace brings us up to date on the soon to be released Supreme Court opinion regarding interstate wine sales. I scan the net each week to see if the cases have been decided as it will make interesting Constitutional Law no matter the outcome and will get everyone’s federalism juices flowing.  See also the article at Informit.com that got George’s juices flowing.

Before I Go Part II

• I was just browsing David Giacalone’s f/k/a post regarding “fundamentalist-conservative Catholics” (a term I am not sure describes any Catholics I know).  I know fundamentalists and really conservative Catholics, but the intersection is a null set…. something about the earth being created in 7 days .. tends to separate the two. I do, however, get David’s point regarding the Priests for Life web poll on whether it the Congress should over rule the Supreme Court. This is a reaction to the Shaivo debacle. Well Congress can, of course, over rule the Supreme Court and has done so in cases of statutory interpretation where the Congress (and the President) believe the Court misunderstands the intent of a law.  The Congress passed an amendment to the civil rights act of 1964 to overrule the Court’s opinion in Grove City College v. Bell where the court held that federal student grants -so-called BEOGs constituted federal funding which triggered Title IX’s non-discriminatory provisions for athletics.  So, Congress can say  these grants were not supposed to be counted in determining whether title IX applies and Congress can over turn the Supreme Court’s ruling.  Congress can also alter the powers of the Federal courts to give jurisdiction (or take it away) and it can also refuse to give the judges and justices raises or appropriations for judicial activities.  Congress, however, can’t overturn the Court’s interpretation of the Constitution—maybe it could have it it had the incentive to do so right after Marbury v.Madison, but that power, if Congress ever had it, is permanently atrophied.  Thus, Congress’ ability to undue the incorporation doctrine of the XIVth Amendment or the penumbral rights which some claim come from thin air is non-existent.  All we are left with is campaigns to impeach Earl Warren or to get a constitutional amendment to over turn Roe v. Wade.  [Although after reading Prof. Althouse’s comments on the 11th Circuit’s opinion in the Shaivo case, it makes me think that the 9th Circuit is saying to itself—”Good! Someone else is taking the heat,” and that there may be Congressional pressure placed on the federal judiciary in terms of fewer resources.]
• I was looking at Professor Althouse’s post on her image search at Google.  She got Osama, but I got a headstone as the number 1 image.  I am not sure which is worse!

Its a Slow Week

How Appealing "Neb. Hog Farm Neighbors Win Court Battle". Howard Bashman uses Westlaw to search for earthy barnyard phrases! I always wanted to do that.

If you are curious...

About what the Supremes did this week regarding the Pledge of Allegiance just read this from Southern Appeal. I wish law school had case summaries like this!