Oblique Torts

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Contents

Oblique Torts

Fraud

Fraudulent Misrepresentation – provides recovery for pure economic loss, unassociated with other injury

5 elements:

(1) Material Misrepresentation

  • Even a technically accurate statement can constitute a misrepresentation if it is intended to
  • Doesn’t need to be verbal – physically disguising a defect can suffice
  • NOT mere opinion unless opinions by an expert to a non-expert
  • Materiality – If either a reasonable person would attach importance to it in determining his action in the relevant transaction, OR the maker of the statement either knows or should know the other person is likely to regard it as important.
    • Past or present material fact

(2) D acted with requisite scienter

  • D has to know that the misrepresentation was false or acted w/ reckless disregard as to its falsity

(3) Intent to induce reliance

  • Joke is not actionable

(4) Misrep caused justifiable reliance (causation)

  • Sometimes limited by unforeseeable losses

Justifiable – detrimental – reliance

  • NOT justified if the misrepresentation is immaterial or is mere opinion
  • Case specific – look to the qualities and characteristics of the particular P, and her circumstances

(5) Pecuniary damages

  • “Benefit of the bargain” – expectation damages; PD if malice is proven


Pinnacle Peak Developers v. TRW Investment Corp. – Alleged fraud = oral agreement “not to worry about the off-site improvements” & the express K which said “you can exercise the option ‘if and only if’ you complete “off-site improvements.”

  1. HOLDING: Evidence of a prior oral statement was inadmissible under the parol evidence rule despite allegations of promissory fraud because:
    1. There was a clear contradiction between the written agreement and alleged oral representation
    2. Parties were experienced
    3. Parties were represented by counsel
    4. It involved a relatively substantial and sophisticated real estate transaction
    5. The written option agreement was a “formal contract”

Committee on Children’s Television, Inc. v. General Foods Corp. – Δ’s advertising of certain sugared breakfast cereals was fraudulent, misleading, and deceptive.

  1. Unfair Competition/Consumer Protection COA: Didn’t need to plead the exact language of every deceptive statement; description of Δ’s scheme to mislead customers was sufficient.
    1. POLICY: Impractical for π’s to compile every advertisement, which change constantly
    2. The organizational π’s had standing because the statutes permitted a complaint by any person on behalf of the general public.
  2. Fraud COA: Individual π’s could prove damages
    1. Comparative Negligence doesn’t have an impact on fraud.
    2. Organizational π’s could not prove the damages element = no standing
  3. Breach of Fiduciary Duty COA: doctrine not for fighting fraud

Intentional Interference

Intentional interference with Contract:

  • Allows recovery when the D intentionally interferes with a valid contract between other parties
  • Damages in such cases can be awarded for:
    • Economic losses
    • Mental distress
    • Punitive Damages if malice is proven
  • Justification or Exceptions
    • For an interference with non-terminable at will contracts, but they are quite limited.
      • Ex. There is no liability if the D interfered with a Contract that was illegal or against public policy

Intentional Interference with Prospective Economic Relations

  • Allows recovery when D intentionally and unjustifiably disrupts the Victim's economic expectations not embodied in an actual contract
  • Damages can include an action for lost business
  • Justification of Exceptions
    • Same as above
    • Also fair competition is a justification

Elements of both Interferences

(1) A valid K or economic expectancy between the P and 3rd Party

  • Requires proof of valid Contract
  • Mere hope for customers or economic profit is insufficient

(2) Knowledge of the valid K or economic expectancy by D

  • D must know facts from which she should have concluded that a valid contract existed

(3) Intent by D to interfere with the K or economic expectancy

  • The interference must be intentional

(4) Interferece caused by the D (causation)

  • The D must have actually caused the interference

(5) Damages to P

  • P must have suffered damages

Justifications for Interference

  • There are 4 sets of circumstances that justify both interference
    • Statements of truthful information or honest advise within the scope of the request
    • Interference by a person responsibel for the welfare of another while acting to protect that person's welfare
    • Interference with a contract which is illegal or violates public policy
    • Interference by someone when protecting his or her own legally protected interests in good faith and by appropriate means



Scallywags

  • Restaurant owned by P who leased property to F
  • F managed business as P's employee, but F started talking with D who convinced F to take over the business and they would help him get started
  • F terminated his relationship with P
  • Court deemed it an an interference of F's K with P

Breach of Fidiciary Duty

  • Elements of Breach of Fiduciary Duty
    • The existence of a fiduciary relationship
      • Trustee/beneficiary
      • Attorney/client
      • Directors/officers to corp
      • Agent/principal
      • Partner/partner
      • Joint venturer/joint venture
    • Its breach
    • Damage proximately caused by that breach

April v. KTTV

  • ISSUE: Whether P has pleaded a cause of action for breach of fiduciary duty of a joint venture
  • Joint venture: an undertaking by 2 or more persons jointly to carry out a single business enterprise for profit
  • The elements necessary for its creation are
    • Joint interest in a common business
    • With an understanding to share profits and losses
    • A right to joint control
  • A joint venture continues until the purpose for which it was formed has been accomplished or it is expressly extinguished
  • HOLDING: Yes, 1st amended complaint sufficiently alleged facts sufficient to support a cause of action for breach of fiduciary duty of a joint venture. The issue needs to be determined at trial.

Defamation

Four Elements

(1) Defamatory Statment

(2) Of and Concerning the P

(3) Publication of Defamatory statement

(4) Damage to Ps Reputation

Defamatory Statement

  • P must persuade jury statement at issue is defamatory
  • Under CL statement must hold P up to scorn, ridicule, or contempt or Rest – is defame if tends to harm the reputation of another as to lower him in estimation of community or deter 3rd persons from associating or dealing w/him
  • Defam statement is one that harms the reputation by injury a person’s general character or causing personal disgrace
  • Reasonable person std giving language its fair and natural meaning rejecting extreme interps

(1) Defamatory to Whom?

  • It is not necessary P show most ppl would have interpreted the statement in a defame fashion – enough P shows a substantial and respectable minority would comprehend defame nature of the communication

(2) Statement Not Facially Defamatory – Inducement and Innuendo

  • Sometimes defamatory impact can only be understood by the addition of extrinsic info where P needs to plead extra facts to make the statement defamatory (inducement) or to explain the defame impact (innuendo) if not obvious

Of and Concerning the P

  • P must show defamatory communication was understood as referring to her
  • If P can show this it is irrelevant D did not intend to refer to P

(1) Group Defamation

  • Defam communications discrediting behavior to unnamed members of a group
  • In a small group each of the ppl could bring defamation action if reasonable reader could believed if referred to any 1 individual of that group

(2) Corporate Ps

  • Corps and business entities where communications defames their business character (ex. trustworthiness) or deters 3rd parties from dealing w/them

Publication and Republication

  • P must establish the defame communication was published
  • Actually means to simply reach a single 3rd party other than defamation P

Damages

  • Ps reputation injury may be presumed permitting P to recover compensation w/o any proof beyond defame nature of communication
  • General damages – provide comp for emotional trauma and harm suffered by Ps who rep was ruined
  • Whether P has to prove special damages depends on whether defame communication is considered libel or slander

(1) The Libel/Slander Distinction

  • Slander is an oral utterance (by sound)
  • Libel is a more permanent expression like a writing, photo, or statue (by sight)

(2) Slander and Slander Per Se

  • P generally must meet burden of pleading and proving special damages
  • Special “slander per se” – sometimes proved due to extreme reputational injury to P w/o proof of special damages
    • Four traditional slander per se categories permit presumed reputational damages absent special damage
      • (1) slanderous communications directly call into question Ps competence to perform her job
      • (2) Statements claiming P has a current and bad disease like syphilis
      • (3) Allegations of serious criminal misbehavior
      • (4) Sexual misconduct regardless of gender

(3) Libel and Libel Per Quod

  • Any libel P may recover general (presumed) damages
  • Libel per se (libel on its face) from libel per quod (libel that req extrinsic evidence such as inducement or innuendo)
  • For libel per quod – P must show special damages unless falls into per se categories

Common Law Defenses

  • Most important CL defense - truth

(1) Consent of P

(2) Substantial Truth

  • Defam cause of action intended to permit Ps to vindicate rep harm caused by false communications about P
  • If communication was true, no basis for defamation action
  • D does not establish truth by showing literal truth of communication, but needs to show the truth of the underlying allegation, not just accuracy of it
  • While D had to show accuracy and truth of the statement in issue – did not have to show the literal truth of every aspect – substantial truth is the test
    • Ex. where D reports P killed 12 ppl when actually killed 11 vs. where D reports P killed 12 ppl and actually robbed 11 ppl, unlikely substantial truth could be found in the latter

(3) Absolute Privileges

  • Absolute privileges under which D could escape liability even if knew the statement was false or published to hurt P’s rep
    • Gov proceedings involving judicial, leg, and exec communications
    • Also, comments made outside courtroom similarly privileged if closely related to the litigation, however, attorney’s comments about a case to the media would likely not
    • Communications by one spouse to another and tv broadcasts of a candidate’s response to another

(4) Qualified (conditional) Privileges

  • Based on social utility of protection communications made in connection w/speaker’s moral, legal, or social obligations
    • Ex. to not self-incriminate, 3rd party – prospective employer asks about a former employee, employer has qualified privilege to provide info
  • 3rd party must need the info and be able to act on it, and must be relevant

Constitutional Restraints

(1) STATUS OF Plaintiff

  • Public Officials – those who are positioned to affect policy (e.g. police, not teacher)
    • Actual Malice* – Public official must show that the Δ either knew that the statement was false or recklessly disregarded whether the communication was false by clear and convincing evidence
    • Requires more than Δ’s failure to investigate or unreasonable conduct
  • Public Figures – All-Purpose/widely known (e.g. Bill Gates; NOT socialite, soviet spy, whistle blower, prominent attorney)
    • Limited – voluntarily injects themselves or is drawn into a particular controversy with a limited range of ideas
    • Must have actual malice but with *lower standard of proof*
    • They assume the risk of some reputational harm by involving themselves in issues of importance
  • Private Persons – depends on the Subject Matter; private or public ↓

(2) SUBJECT MATTER – public or private concern

  • Private Concern – can recover more readily than public because actual injury is more evident; Actual Malice not needed to recover (PD if private π & private subject matter)
  • Public Concern – Actual Malice needed to recover presumed damages or PD

Constitutional Limitations on Punitive Damages

State Farm v. Campbell

  • HOLDING: Few awards exceeding single-digit ration between PD and compensatory damages will satisfy due process
    • Ratios are not binding, they are instructive
  • RULE: 3 guideposts for review PD
    • (1) Degree of reprehensibility of the defendant's misconduct
    • (2) Disparity between the actual/potential harm suffered and PD
    • (3) Difference between the PD award and the civil penalties authorized in comparable cases

Invasion of Privacy

Four torts for invasion of privacy

1. Intrusion (upon seclusion)

  • One who intentionally intrudes, physically or otherwise, upon solitude or seclusion of another or his private affairs or concerns, subject to liability to the other for invasion of privacy, if intrusion would be slightly offensive to a reasonable person
  • Tort addresses acts of intrusion w/a V's zone of privacy
    • Ex. placing a mic in a matrimonial mattress (no req for info to be obtained or communication only if intrusion itself constitutes the interference)
  • Shulman v. Group W Productions, Inc. (On Scene Emergency Response Documentary)

2. Publicity (Appropriation of name or picture and right of publicity)

  • One who appropriates to his own use or benefit the name or likeness of another is subject to liability to other for invasion of his privacy
    • Ex. unauthorized endorsement of a product, but not to journals or books about a person
    • Also, not tortious to put pic of someone on a magazine and write an article about them
    • Polydoros v. Twentieth Century Fox Film Corp. (Sandlot case)

3. False light (place P in false light before the public)

  • Elements must be established by P include D's
    • (1) publicizing - communicate false facts to substantial number of ppl (greater req than defamation)
    • (2) false facts - includes but not limited to defamatory statements actionable under defamation, seriously damaging to rep
    • that a reasonable person would object to, and
    • (3) in addition, acted with NYT malice (knowledge of falsity or reckless disregard toward the truth)
  • Overlaps with defamation, easier to evade the special damages reqs for slander etc, by labeling action false light claim

4. Disclosure (public disclosure of private facts)

  • Elements
    • (1) publicity of - D communicate private facts to a significant group of ppl
    • (2) private facts
    • (3) highly offensive to a reasonable person which are
    • (4) not of a legitimate public interest (tort not actionable when revelation of private facts is of legit public interest)
  • The disclosure of private fact privacy tort is unlike defamation, b/c makes communication of true facts subject to liability
    • invasion of protected privacy is a valid basis for liability even where info disclosed is accurate

Seduction

  • Elements
    • (1) Enticement, Persuasion, or Promise of Marriage
    • (2) Female must be chaste at time of seduction
    • (3) Sexual intercourse as a result of the enticement

Criminal Conversation

  • Elements
    • (1) An actual marriage to which P is a party
    • (2) D had sexual intercourse w/ P's spouse
  • Originally this cause of action was only for husbands suing for someone having sexual intercourse with their wife. Gradually made so that wife could as well.
  • Ex. Thomas v. Siddiqui
    • Abolished Tort of Criminal Conversation in MO

Alienation of Affection

  • Elements
    • (1) D engaged in wrongful conduct
    • (2) P lost the affection or consortium of his/her spouse
    • (3) Causal connection between D's conduct and P's loss

Misuse of legal process

  1. Abuse of process - RULE: the intentional misuse of either a civil or criminal legal process for an ulterior purpose resulting in damage to the π
    1. Depositions, subpoenas, and property attachments
    2. The use can be wrongful regardless of who ultimately wins the litigation
    3. Π has the difficult onus of proving an ulterior purpose


Malicious Prosecution - Criminal or Civil

Elements:

(1) Institution or continuation of a proceeding

  • D must be responsible or at least supportive
  • e.g. Asking another to bring or maintain the suit
  • false testimony is not enough, although it can be used as evidence that the D had an improper purpose

(2) Termination of the proceeding in favor of the “prosecutor”

  • Original case must be completed
  • ISSUE: dropping the proceeding just prior to an anticipated finding for the “prosecuted”

(3) Absence of probable cause – P must prove that there was no reasonable basis for the prosecutor to believe the prosecuted was guilty

(4) Improper purpose of the accuser – only critical when the accuser has not acted reasonably in presuming the accused guilty or liable

(5) Damages suffered by the accused – Economic consequences, Emotional distress, Reputational injury, Punitive damages if malice is proven

  • Hard to Win* = b/c you must have a judgment for the accused on the merits
    • BUT SEE: if a meritless suit is brought, a D is going to want to settle
  • POLICY: do not want to deter people from seeking legal redress with the fear that if they lost their case in court, they would have to compensate the vindicated D’s for their expenses
    • Reluctant to address excessive litigation by imposing new litigation as a remedy
  • Scheicher v. Western State Bank of Devils Lake – P picked up a hitchhiker. Hitchhiker gave π $300 check. P called to see if check was valid. Bank said it was. Police somehow got involved.
    • HOLDING: Bank is not liable for malicious prosecution because there was no evidence that the bank initiated criminal fraud investigation regarding π’s alleged fraud.
      • Scheicher didn’t sue the police because they have immunity.
      • Immunity of Public Officials – Prosecutors, judges, other public officials; does not preclude malicious prosecution claims against others who fabricate evidence with the intent to stimulate wrongful prosecutions
      • Bank didn’t have a duty to tell police π called

Matrix for Intrusion of Privacy Torts

  • Intrusion
    • To how many people does it have to be published? N/A
    • Statement is true or false? N/A
    • Must it be highly offensive? Yes
    • Intent requirement? NEED
  • Disclosure of private facts
    • To how many people must it make? Public (significant number)
    • True or False statements? True
    • Highly offensive? Yes
    • Intent? NEED
  • False Light
    • How many people? Public
    • True or false statements? False
    • Highly offensive? Yes
    • Intent? Need actual malice
  • Defamation
    • To how many people? 1
    • True/False? False
    • Highly offensive? No
    • Intent? Complicated
  • Outrage (IIED)
    • How many people? N/A
    • True/False? N/A
    • Highly offensive? Yes + (must be extreme and outrageous)
    • Intent? Yes
  • Right of publicity (appropriation)
    • How many people? Used commercially
    • True/False? Either
    • Highly offensive? Yes
    • Intent? None

Whistleblower Statutes

  • When an employee turns on their employer and turns them in
  • Since employers can fire their employees at anytime for any reason, they can, and often do, fire them for whistle blowing
  • Some places have enacted statutes where employees can bring suit for this.
  • The time period in which one can bring suit is often short (some as short as 30 days)
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