Business Law I Intentional Torts and Business Torts

A tort is a violation of a duty imposed by civil law. Tort Means “Wrong” A tort is a violation of a duty imposed by civil law. Examples: Defamation -- making a false statement about someone - written or verbal Negligence -- performing wrong surgery Interference with Contract -- stealing a client away from a competitor Fraud -- offering to sell something that doesn’t exist

Tort vs. Criminal or Contract Law Criminal Law -- behavior classified as dangerous to society; prosecuted by the government, whether victim wants to prosecute or not; money award goes to the government Contract Law -- based on breach of an agreement between the two parties; victim prosecutes and receives compensation or restitution. Tort Law -- based on an obligation imposed by the law with no agreement needed between parties; victim prosecutes and receives compensation or restitution.

Categories of Tort Law Intentional Torts Do not necessarily require an intention to harm the victim, only an intention to perform the act which caused the injury. (Intentionally throwing an object, but not meaning to hit anyone is a tort if it causes injury to someone.) Includes business torts, a category of torts perpetuated almost exclusively by business entities. Negligence and Strict Liability Tort injuries caused by neglect.

Crimes vs. Intentional Torts Nature Criminal Civil Elements Violation of a statute Intent Harm to another person or property Actors Government prosecutor v. defendant Plaintiff v. defendant (victim) (tortfeasor) Burden of Proof Prosecutor must establish defendant’s guilt beyond a reasonable doubt. Plaintiff must establish defendant’s liability by a preponderance of the evidence. Punishment Fines, imprisonment, execution. Defendant may have to pay the plaintiff compensatory and punitive damages.

Types of Intentional Torts Intentional torts may be interference with: Personal Rights Examples: battery, assault, false imprisonment, infliction of emotional distress, defamation, invasion of privacy, misuse of legal proceedings Property Rights Examples: trespass to land, trespass to personal property, conversion Economic Relations Examples: disparagement, interference with contract, interference with economic expectations

Intentional Torts Battery Battery -- is a touching of another person in a way that is unwanted or offensive. The touching does not have to hurt the victim -- sexual touching that is offensive, but not painful, is battery. An intentional action that does hurt someone may be battery even if the injury is unintentional. The most common defense to a charge of battery is consent.

Intentional Torts Assault Assault -- is an action that causes the victim to fear an imminent battery. Assault can occur without the battery ever happening. Pulling a gun on someone -- even if it is unloaded -- is usually considered assault. The plaintiff must prove that the defendant’s actions were sufficient to create a well-grounded apprehension of imminent battery in the mind of an ordinary person in the plaintiff’s situation.

Intentional Torts False Imprisonment False imprisonment -- is the restraint of someone against their will and without reasonable cause. An employer who doesn’t let a sick employee go home might be guilty of false imprisonment. If the police detain a person with no reason to suspect him of any crime, it could be false imprisonment. In general, a store may detain a person suspected of shoplifting if there is a reasonable basis for the charge and the detention is done reasonably (in private and for a reasonable time).

Intentional Torts Intentional Infliction of Emotional Distress Historically, no recovery was allowed if the injury was only emotional instead of physical. Today, most courts allow a plaintiff to recover from a Defendant who intentionally causes emotional injury. Behavior causing injury must be extreme and outrageous. Must have caused serious emotional harm. Some courts allow recovery for emotional injury caused by negligent behavior.

Intentional Torts Defamation Defamation -- is irresponsible speech to harm another’s reputation. Written defamation is libel. Verbal defamation is slander. There are four facts to prove to win a defamation suit: The defamatory statement was actually made. The statement is false. The statement was communicated to someone other than the plaintiff. In slander cases, the plaintiff must show some injury that resulted from the defamation.

Defamation (cont’d) Opinion -- to be defamation, the statement must be provable and not simply someone’s opinion. Vague terms in the statement usually indicate it is an opinion, not a provable fact. Extreme exaggerations are usually not taken as fact. Public Personalities Include: public officials (police and politicians) and public figures (movie stars and other celebrities) Public personalities have a harder time winning a defamation case because they have to prove that the defendant acted with actual malice.

Case Analysis Defamation You Be the Judge - Yeagle v. Collegiate Times, Virginia Supreme Court, 1998 Facts Issue Decision? Reasoning? Discussion? Lower court ruling AFFIRMED

Privacy and Publicity Intrusion (prying into someone’s private life) -- is a tort if a reasonable person would find it offensive. Examples: wiretapping, stalking, peeping Would this include buying your personal information from your credit card company? Commercial Exploitation -- is when a person’s image or voice is used for commercial purposes without that person’s permission.

Case Analysis Intentional Infliction of Emotional Distress Jane Doe and Nancy Roe v. Lynn Mills, 212 Mich. App. 73, 536 N.W.2d 824, 1995 Mich. App. Lexis 313, Michigan Court of Appeals, 1995 Facts Issue Decision Reasoning Discussion

Misuse of Legal Proceedings Requirements Type Malice Wrongful Suit Ended in Plaintiff’s Favor No Probable Cause Wrongful Motive Malicious prosecution Yes Wrongful use of civil proceedings Abuse of process No

Compensatory Damages A jury may award compensatory damages -- payment for injury -- to a plaintiff who prevails in a civil suit. The Single Recovery Principle mandates that the court must decide all damages -- past, present and future -- at one time and settle the matter completely. Damages may include money for three purposes: to restore any loss (such as medical expenses) caused by the illegal action to restore lost wages if the injury kept the defendant from working to compensate for pain and suffering

Punitive Damages While the purpose of compensatory damages is to help the victim recover what was lost, punitive damages are intended to punish the guilty party. Intended for conduct that is outrageous and extreme Designed to “make an example” out of the defendant Should deter others from doing same conduct and prevent this defendant from repeating actions Sometimes punitive damage awards are huge, but in most cases they are close to or less than the amount of compensatory damages awarded.

Case Analysis Measure of Punitive Damages Boeken v. Philip Morris, Incorporated, 127 Cal. App.4th 1640, 26 CalRptr.3d 638, California Court of Appeals, 2005 Facts Issue Decision Reasoning Discussion

Business Torts Intentional torts that occur almost exclusively in a business setting are called “Business Torts”. Interference with a Contract exists if the plaintiff can prove these elements: There was a contract between the plaintiff and a third party and the defendant knew of the contract. The defendant induced the third party to breach the contract or make performance impossible. There was injury to the plaintiff.

Business Torts (cont’d) Interference with economic expectations -- is unreasonable interference with another’s business. Disparagement -- is the making of false, harmful statements about products or services. Proof of actual damage (e.g., lost sales or other opportunities) is necessary. The most common defense to a charge of disparagement is truth.

Interference with Property Rights Trespass to Land -- is any entry onto land in the possession of another without permission. Example: A tenant who stays after expiration of the lease. No actual harm to the property is necessary (but if no actual losses result, plaintiff is only entitled to nominal damages). The most common defense to trespass to land is privilege.

Interference with Property Rights (cont’d) Trespass to Personal Property -- is intentional interference with personal property in the possession of another that: Harms the property, or Deprives the possessor of its use for an appreciable time. The most common defenses to trespass to personal property are consent and privilege.

Interference with Property Rights (cont’d) Conversion -- is the unlawful taking of or exercise of control over the personal property of another. One may be liable for conversion even though he/she mistakenly believes he/she is entitled to possession. Example: Wrongful sale, mortgage, lease, or use of the goods of another. Plaintiff’s remedy is the reasonable value of the property. Difference between trespass and conversion is based on the degree of interference (e.g., extent and duration).

Quiz Matching Questions Interference with a contract Fraud Defamation False Imprisonment Punitive Damages Intentional Infliction of Emotional Distress Commercial exploitation 1.  Money awarded to punish a wrongdoer. 2.  Intentionally restraining another person without reasonable cause. 3.  Intentional deception, frequently used to obtain a contract with another party. 4.  Deliberately stealing a client who has a contract with another. 5.  Violation of the exclusive right to use one’s own name, likeness, or voice. Using a false statement to damage someone’s reputation. An act so extreme that an average person would say, “Outrageous!”

Quiz True/False Questions A store manager who believes a customer has stolen something may question him but not restrain him. Becky punches Kelly in the nose. Becky has committed the tort of assault. A defendant cannot be liable for defamation if the statement, no matter how harmful, is true. In most cases, a winning plaintiff receives compensatory and punitive damages. A beer company that wishes to include a celebrity’s picture in its magazine ads must first obtain the celebrity’s permission. F T F T

End of Intentional Torts and Business Torts