Blaw 3202 Test 2Chap 4, 5, and 6 Chap 4 Intellectual Property

3/4/2010 1:36:00 PM

Intellectual propertyrefers to a number of intangible rights which include trade names, trademarks, service marks, trade secrets, copyrights, and the right of publicity. It is a part of the promotion process. Owners of intellectual property have an exclusive but limited use of the symbols or names. The location of a non-competitor using the same trademark, the type of product or service offered and the manner in which it is sold are some of the factors considered by the courts in disputes. Licenses and endorsements: Rights can be transferred to another party for a fee, in the form of an endorsement or license. y Licensepermission, granted by an owner of intellectual property to another party to use the property in an agreed upon manner. (For clothing) y Endorsementendorsement of a commercial product or service is a public statement of preference for and recommendation of that product or service by a person or entity. o There can be celebrity or expert endorsements. Each celebrity or professional should actually use the product. Trademarks: They can include words or symbols or both. Also can include shapes, colors, sounds, and movements. Anything that distinguishes someones goods or services from others may qualify as a protectable mark. y Trademarkidentifies goods with the manufacturer (nike swoop, lexus cars, mcdonalds burgers) y Service Markidentify the provider of a service like H&R Block tax service, AT&T phone service.

y

y y y

Trade Dressincludes a trademark and the entire package of the product or service. Like mcdonalds Golden Arches, or the shape of a coke bottle, or the color scheme of a football team. Trade NameIdentifies the business itself, such as General Motors. Certification MarkMark is to certify compliance with standards, like good housekeeping seal of approval. Collective markto indicate membership in a group like the Boy Scouts.

Lanham Act: The most important trademark law is the Federal Trademark Act which is referred to as the Lanham Act. It is designed to prevent non owners from exploiting the goodwill or recognition of an existing mark. y Federal registration provides rights throughout the US and creates a presumption that the mark I valid and being properly used as a trademark. After 5 years of continuous use the registration can become incontestable which eliminates numerous grounds for cancellation and other defenses. y A trademark is valid for 10 years and can be renewed provided its actual use in interstate commerce. Under fed and LA law, rights in a trademark may be obtained by use of the mark even without registration. y In order to obtain relief in a trademark action a plaintiff must establish 3 elements: o Distinctivea mark must be distinctive to have protection under the law. The marks are classified as fanciful, arbitrary, suggestive, descriptive and generic. Arbitrary or fanciful marks bear no relationship to the product or service and are the strongest because thy are the most distinctive. Examples are NIKE and APPLE. It is very hard to obtain a trademark on a generic term. Ex: to name your tv station the sports channel. Some words may not be distinctive but may acquire trademarks through Secondary Meaningex is Monday Night Football.

o Ownershipownership in a mark is achieved pursuant to use and registration as set forth in the law. Plaintiff must establish ownership. o Likelihood of Confusionin most cases the plaintiff will have to prove that the defendants use of the mark is causing confusion among consumers. This means that the public is associating the defendants with the plaintiffs mark. Exif someone died at The Sports Illustrated Bar which has no association with the magazine, leads people to believe that the magazine owns that bar. Passing off (knock offs and counterfeits): Passing off occurs when a product is sold as a trademark brand, although it was not manufactured or licensed by the company that owns the mark. The seller pays no licensing fees or anything like that. Confusion: This kind of case involves a new or smaller company using a mark or name similar to a larger or more well recognized company to take advantage of the brand awareness established by the larger company. People will often buy the product but by mistaking its relationship to the established brand. y There are cases of Reverse Confusionwhich is when the established mark of a smaller less known company is adopted by a larger company. Disparagement: The Lanham Act prohibits registration of trademarks that are disparaging, scandalous or contemptuous. Disparagement cases deal with language or symbols that are sexually offensive. Newer cases involve sports teams being named Redskins, Indians, Braves, Seminolesetc. Domain Names: Domain names can conflict with trademarks and other tradition business identifiers. Many domain name registrants are parties who have no previous association with the name but filed the registration with the intent to profit by selling the domain name to the business associated with the name. These people were given the name Cybersquatters.

Federal Trademark Dilution Act: Cybersquatters do not actually use the domain name in commerce, but inventory it for sale when it become demanded. This approach eliminates the consumer confusion element necessary for a direct infringement action. The FTDA allows an owner of a famous and distinctive mark to obtain an injunction and in some cases damages for any commercial use of the mark that causes dilution of the distinctive quality of the mark. Some courts have held that mere registration of a name does not constitute use in commerce, but the offer to sell the mark is sufficient use of the mark under the law. There is now an anti-cybersquatting amendment to the Lanham Act. Metatags: Metatags are words embedded in a web pages coding, unseen by the viewer, that search engines use to find and rank the relevancy of the page in response to a key work search. Gulf Coast Bank v. Gulf Coast Bank & Trust Company This case deals with secondary meaning. Gulf coast bank operates mainly in the Acadiana area, Gulf coast bank and trust company operates mainly in the new Orleans area. GCB claimed that the defendants corporate name is deceptively similar to theirs and is in violation of Louisiana Revised Statutes. And the GCB&TC had infringed on its trade name and should be enjoined from further use of the name. y The first thing the courts looked at it whether GCB had a protectable property right in its name such that it may exclude others from using it. y Use alone does not create a protectable proprietary interest, the trademark or name must be distinctive, either by being inherently distinctive or by have secondary meaning. y The trial judge granted GCB&TC motion for summary judgment on other grounds other than secondary meaning. Seafood Restaurant Services inc v. Yvette Bonanno and professional seafood management inc. Bonannos Drusilla Seafood and Pasta Restaurant.

This case deals with an appeal by the defendants from a the judgment of the trial court issuing a prelim injunction preventing defendants from use of the term Drusilla within the sate of Louisiana in connection with any restaurant. y Plaintiff sought to prevent the use of the trade name Drusilla when used in connection with the restaurant business. But when this name is considered as a whole, the name is not inherently distinctive and secondary meaning must be established. y Plaintiff presented evidence from two consumers who, having seen the advertisement for the new restaurant, mistakenly believed that Drusilla Seafood Restaurant was opening up another place, claiming that they had acquired a secondary meaning. So there was actual confusion. y So the judgment of the trial court is affirmed. Costs of the appeal are to be borne by the defendants. Court ruled in Plaintiffs favor. Inkas Scool weak Inc v. School Time, LLC. This case deals with plaintiff, Inkas Coolwear SCoolwear appeals from the trial courts judgment of dismissal failing to enjoin defendants, School Time School Ware use of its trade name. y The trial court held: o 1. Plaintiff did not have a proprietary interest in the name SCoolwear, thereby establishing trade name infringement. o 2. Defendants actions did not constitute tortuous interference with a contract due to its prior contractual agreement o 3. Defendants exclusive contract with another company did not constitute unfair trade practices. We affirm. y The question in this case is where the name Scool wear could be defined as suggestive as opposed to descriptive as the name implies. It can be inferred that the trial court determined that the name SCool wear standing alone was a descriptive term, thereby requiring a secondary meaning. y The appellate court found that the finding of the lower court the name SCool wear as it is used by the appellant is not distinctive. University of Georgia v. Laite

Laite, a Macon Georgia wholesaler of novelty beers began marketing Battlin Bulldog Beer. It was sold in red and black cans with a black G. But the UGA athletic association obtained preliminary and permanent injunctive relief in federal district court based on the likelihood of confusion between the Battlin Bulldog and the University of Georgia Bulldog. The judgment of the district court was affirmed in all respects. y Laite argues that there is no confusion because the cans contain a disclaimer saying that they are not associated with UGA. But that is rejected because it is inconspicuous on the can and practically invisible when the cans are grouped together in a 6 pack. y The injunction is upheld. Parody A long standing court battle over The Velvet Elvis lounge in Houston. A trial court ruled in favor of the lounge finding that the name was a parody of the Elvis mystique. Later an appellate court reversed the trial court decision holding that parody was not an affirmative defense, but one factor that should be considered in the likelihood of confusion analysis. Nike v. Just Did it enterprises Case deals with parody. Mike Just Did It. The parties disputed over whether NIKE and MIKE would be pronounced the same. Intent of the Parodist: The requirement of trademark law is that a likely confusion of source, sponsorship or affiliation must be proven, which is not the same thing as a right not to be made fun of. Copyrights The protect the original expression of ideas. A person who creates an original work in tangible form obtains a copyright. Includes authorship, literary works, music, dramatic, pictures, graphics, sounds, and architectural works. y The copyright entitles the owner to injunctive relief and actual damages for violation of the copyright.

y y y

In order to obtain statutory damages and attorney fees, the copyright must be registered. Books, music, movies, and tv programs are the most common copyrighted things. Copyrights after 1978 generally provide protection for up to 70 years after the death of the author. The duration for works for hire is 95 years from publication.

Misconceptions over copyrights: y The material does not have to have a copyright notice for it to be protected by law. y There IS a violation even if you GIVE the copyrighted material away for no charge or cost. y Substantial damages can be awarded if it is shown that the commercial value of the property was diminished. 2 types of copyright infringement: y Directthe exclusive rights of the copyright holder must be violated. y Secondarythis is applied in cases where the defendant was not personally involved in the infringing activity but still shares in the liability. y Contributory- exists if the infringer has knowledge and induces or causes the infringing conduct of another. y Vicariousoccurs when the defendant has the right and ability to control the infringers acts. Fair Use y It is an aspect of copyright law is the exemption known as fair use. y It was created to allow things as commentary, parody, news reporting, research and education about copyright works without the permission of the author. y Fair use should not harm the value of the work. Unusual Copyrights:

In Production Contractor V. WGN Continental Broadcasting, the court held that even a decorative float was subject to copyright. Privacy-the right-of-publicity y The law recognizes that every person has a right to privacy. This is the right to control and profit from the use of ones name and likeness. y The unauthorized use of this right by another is referred to as misappropriation or invasion of privacy and is grounds for a civil suit for damages and injunctive relief. Motschenbacher v. R. J. Reynolds Tobacco The court expanded the protection of a celebrity beyond his name or likeness in this case. Mots was a race car diver and his personal trademark was his car which he individualized to set it apart from other drivers. y Mots sued the defendant for its tv commercial which depicted the plaintiffs car in the foreground and suggested the car was sponsored by Winston Cigarettes. y Court ruled the plaintiff was identifiable because of his car. Onassis v. Christian Dior Case involves plaintiff suing defendant for its commercial advertisement containing a picture of a look a like model. y It was undisputed that the model was put in the ad to take advantage of Mrs. Jacqueline Kennedy Onassiss world wide recognition. y She publicized that she never allowed her picture to be used in connection with the promotion of commercial products. y She was unable to recover under the privacy law because it was limited to a portrait or picture. y She was successful in obtaining an injunction under the common law right of publicity. Corporate sponsorship and ambush marketing

Corporate sponsorship is any time of arrangement in which a company provides money, goods, or services to an event in order to associate with the event. y GM paid 1 Billion dollars to sponsor the Olympics for several years. y The rights, issues, and attempts at exploitation in sponsorship agreements are very similar to those involving intellectual property. Ambush Marketingis the term used to describe the attempts by non sponsoring companies to obtain an unauthorized association with the event. y This strategy involves a non sponsor company engaging in activities which misleads the public into thinking that it is in fact a sponsor. y Chap 5 Agency/Mandate Agency is a legal relationship between two parties, a principal, and an agent. y An agency agreement authorizes the agent to speak and act on behalf of the principal. It the acts of the agent are within the scope of the agents authority, they become legally binding on the principal with respect to the third parties who relied on the agent. y Agency is essential to contractual relationships in the business community. y Corporations could not function without the ability to contract through agents. y Agency relationship is consensual and does not have to meet the consideration requirements of a contract. But the contracts provide the agent with compensation for acting on behalf of the principal. y Agents arent independent contractors or employees. Sometimes lawyers are agents. They generally inform a 3rd party that he is acting as an agent and will identify his principal. This is called DISCLOSED agency. If the agent says he is an agent but does not reveal his principal, then it is called Partially Disclosed agent. y If an agent commits a tort and negligently injures a third party in the course and scope of the agent relationship, the principal may also be liable to the third party for the wrongful injury. Hanson v. Kynast

This case deals with an agent commits a tort and negligently injures the 3rd party. y Hanson sustained a paralyzing injury while playing a lacrosse game. y Hanson grabbed Kynast from the side and held him in a bear hug. Kynast immediately twisted and threw Hanson off his back and Hansons head his the ground and he had serious injuries. y Hanson filed suite against Kynast and Ashland University. y Hanson maintained that since Kynast was acting as an agent of Ashland university, the university was liable under the doctrine of RESPONDEAT SUPERIORthe principal should be responsible for the acts of the agent. Courts held that the relationship of principal and agent exists only when one party exercises the right of control over the actions of another and those actions are directed toward the attainment of an objective which the principal seeks. y A principal agent relationship can only be found if Kynast was under the control of Ashland, and if he took some action directed toward the attainment of Ashlands objective. y The court found that the relationship b/t Kynast and Ashland is more contractualthe student pays fees and agrees to abide by the university rule. In exchange the university provides the student with an education. The student is a buyer of education rather than an agent. y Court found that Kynast is not an agent of the school. The appellees claim that Ashland was liable for Kynasts wrongful acts through the doctrine was properly rejected and the trial court properly entered summary judgment for appellant on the issue. y The judgment or the court of appeals is reversed. A Mandate, procuration or letter of attorney is an act by which one person gives power to another to transact for him and in his name. There are 3 ways an agency relationship can be established: y Express authorityspecific written or oral authorization is given to the agent by the principal.

y y

Impliedwhen the principal, through his conduct, authorizes the agent to act on the principals behalf. Apparentwhere the principal does not intend for the purported agent to have authority, but the principals conduct leads third persons to believe the purported agent does in fact have authority on behalf of the principal.

The agent has no liability or responsibility with respect to the performance of the contract. Independent fire insurance co v. able moving and storage company, belkins real estate sales, and ABC insurance This case involves the national moving companys liability for a fire damage claim against its insolvent Louisiana agent. y The trial court concluded that more probably than not a cigarette ember or butt discarded caused the fire and that Bekins and Able were both liable for the fire damages because their advertisement gave the impression that they were one in the same. y The trial courts judgment against Bekins was reversed by the court of Appeal, which concluded that Bekins did not have any control over the Able employees who moved the Hebert furniture. y Able had actual authority from Bekins and also apparent authority manifested by Bekins advertising and Ables use of the Bekins name. y The decisive issue is whether the trial court was clearly wrong in concluding that Mary Jane Hebert reasonably believed she was dealing with Bekins, rather than Able, creating liability under the doctrine of apparent authority. Emporia Holding company v. city of new Orleans Case deals with an appeal by plaintiff from the trials court judgment denying its request for permanent injunctive relief and granting defendants rule to evict. We affirm. y Emporia was entitled to the exclusive sales of all food, drinks, and merchandise in the facility of the NOLA Municipal Auditorium. Emporia claimed it had a valid lease and that its possession was

y

y

y

being disturbed by Harrahs which had been granted a lease by the city to operate a temp casino in the municipal auditorium. The city evicted emporia saying that its contract was unauthorized an invalid and that they had breached the contract by failing to pay the stipulated annual minimum rentals and failing to live up to other obligations. We conclude, as the trial court did, that pearl cantrelle had no authority to renew the Emporia lease because the multi year renewal was not approved by the city council. The lease is therefore invalid. So this case demonstrates that third parties dealing with agents should try to obtain written verification from principals as to the existence and extent of the agents authority.

Most franchise agreements state that the franchisee is an independent contractor, not an agent or employee of the franchisor. Chapter 6 Insurance An insurance contract is an agreement b/t two or more parties in which one party, the insured, pays a price (premium) to the other party, the insurer. y Insurance is a business approach to spread the risk of loss with respect to uncertain or unforeseen events. y It is a little like gambling. Both endeavors involve risk and uncertainty, but for gambling, the only risk is the loss of the wager and the risk is created by the player. Insurance terms: Liability insuranceprotection for the insured with respect to claims made by third parties against the insured. Co-insurancemeans that the insured is covering some of the risk of loss unless the loss it total. Kind of like a deductible. Insurable interestan interest that the law requires to exist in order for an insured or beneficiary to recover on a policy.

Omnibus clauseused in auto policies and provides that the policy also protects those who are using the vehicle with the permission of the name insured. Bindera temp agreement which provides insurance coverage until the actual policy is approved and executed. Louisiana has an insurance rating commission which is involved in the regulation of rates for property, casualty, surety and inland marine insurance. Insurance contracts are required to be in writing and the policy forms must be approved by the office of the Commissioner of insurance. If a policy is written in clear and unambiguous language, it will be enforced unless against some statute or policy. If there is any doubt of ambiguity in the policy, the courts usually rule in favor of the insured. The law makes a distinction between a licensed agent who writes for one insurance company and a general agent who will attempt to find insurance for the insured from a number of insurers. Car insurance: The following types of insurance are available for drivers: y Liability insurancethis is to protect the insured from a liability claim by a third person. The 3rd party claim would be based on the negligence or fault of the insured which has caused damage to the third party. This insurance DOES NOT compensate the insured for any loss sustained as a result of property or physical damage. y A common belief is that the owner of a car is liable for all injuries caused by the negligence of a driver operating the owners car. That is, if owner A allows driver B to drive As car, A would not be liable if B ran a stop sign and hurt a 3rd party. But As insurance would be liable if B had As permission. y Today, policy minimums are 15/30/25. The Compulsory Motor Vehicle Security Law requires people to have this minimum amount of insurance.

o The 15 is the most the insurance company would have to pay for physical injury to one person. The 30 is the most the insurance company would have to pay for all physical injuries to people in the car regardless of the number of claimants. The 25 is the most the insurance company would be required to pay for all property damages such as to the 3rd parties car. Most private, as opposed to commercial, auto liability policies define the insured as the person as: y The named insured on the policy and spouse y Family members who are residents of the named insured household. y People who are driving the covered vehicle with the permission of the insured or of the spouse and family. Perkins v. Mcdow Case deals with whether the driver of the car was using the vehicle with the permission of the insured as required by the omnibus clause. y The son had exclusive use and control of the car, gave permission to another to drive the car. And accident occurred while this other person was driving the car. The parents told the son that no one was to drive the car without the parents permission. y The trial court and appellate court ruled that there was no express or implied permission for the driver to use the car and so insurance coverage was not available. Safeway insurance company v. state farm mutual ins company Facts: Baines borrowed, with permission, the vehicle of her friend, Jackie Holloway while Baines car was being fixed. Holloways car was insured by Safeway. Baines car was insured by State Farm. y Baines was using Holloways car and hit a little girl..just injuring her. Safeway (Holloways insurer) paid for medical expenses in full for the injuries and expenses of the little girl. y Then safeway filed its petition of Subrogation against State Farm, asserting that the State farm policy which covered Baines vehicle, provided primary liability coverage for the accident.

y

y

The trial court judgment rendered judgment in favor of safeway and against state farm in the amount of the medical expenses. o One of the laws requires that an insurance company shall extend to temporary substitute motor vehicles as defined in the policy and rental private passenger cars and all such insurance coverage in effect in the original policy. Conclusion: for unforeseen reasons, the trial court did not error in granting judgment in favor of Safeway Insurance. The costs of the appeal are assessed to state farm. So safeway, Holloways car insurance provider, did not have to end up paying for the damages cause by Baines, who had state farm insurance.

Farm Bureau v. Darjean Facts: John Darjean, an employee of Johns Body Shop, was delivering a car owned by Costello to his fathers repair shop when he hit another car owned by Barry Orgeron and driven by his wife. Costello was insured by Southern Security Ins Company and Darjean had insurance by American National Property and Casualty Company. Orgerons car was insured by Farm Breau Casualty insurance. y Farm breau paid for property damages to the Orgeron vehicle under the collision provisions of its policy. y Later, farm breau filed the instant suit to recover its collision payments and the Orgerons deductible against American, Southern and their insureds. American and southern filed motions for summary judgment on the basis that their policies expressly excluded coverage of bodily injury or property damage resulting from any type of car business operations, including a repair shop business. y After hearing, the TRIAL court granted American and Southerns motions for summary judgment. Farm breau responded by saying that the automobile business exclusion clauses contained in policies are contrary to the public policy of the state and therefore American and Southern should afford coverage. Later, Breau dismissed appeal against American.

y

y

y

So now the issue on appeal is whether an automobile business exclusion violates these statutory provisions for compulsory omnibus coverage in all automobile liability policies. After reviewing the compulsory law, the appellate court concludes that Southern policy exclusion conflicts with the compulsory law in that it attempts to exclude coverage for persons engaged in a repair shop business who operate the insureds vehicles with his permission. So the trial court judgment upholding the policy exclusions which granted Southerns motion for summary judgment was reversed. The case is remanded to the trial court for further proceedings.

Stanfel v. Shelton Case deals with a minor son was using his moms insured car to deliver pizza in the course and scope of his employment. The minor had his moms permission to use the car for this purpose. The minor was in a car accident during his work. The insurance policy had exclusions which said: any car while used as a public conveyance, to carry people or property for a fee or use in the course of employment is not covered. y The court held that this provision was against public policy and that the mandatory omnibus clause required coverage. Mayfield v. Imperial Fire and Casualty insurance Co Facts: Mayfield was a guest passenger in a car driven by Daniel Cladd when the Cladd vehicle was hit by a car driven by Carlton Reedom. At the time of the accident, reedom was driving his personal car while in the course and scope of his employment with Dominos pizza. y Mayfield sued Reedom and his insurer, Imperial Fire Insurance as well as Reedoms employer, Dominos Pizza along with its insurer, National Union Fire Insurance. y Imperial fire denied coverage for the accident based on a business exclusions which said that any car used in the course of employment unless you have told us the car is for business use, is not insured. It was found that Reedom did not tell his insurance company that he was going to use his car for work purposes. So Imperial moved for summary judgment.

y

y

y

Mayfield, Reedom, Dominos Pizza, and national union all appeal this and contend that the Imperial Fire exclusion violates a Louisiana law. This law is designed to protect the people injured by the operation of insured vehicles. The TRIAL judge stated that insur companies should be allowed some basis for setting the price of premiums and that Reedom paid a lower premium than that of what he would have if he said his vehicle was for work purposes. So the appellate court found that the business exclusion at issue is enforceable.

William Manley v. Pamela Alphonso and Progressive Ins Co Facts: this is a car crash personal injury case. The issue is whether a specified driver exclusion of a car liability insurance policy may legally exclude coverage, not only for the specified driver, but also for the policies named insured when that name insured is sued for negligent entrustment of a vehicle to the specifically excluded driver. y Manley was injured in a car crash. The car which hit Manleys car was owned by defendant Pamela Alphonso and was being driven by her minor son, Melvin Alphonso, at the time of the wreck. y Manley sued Pamela under a theory of negligent entrustment of her car to her minor son. Manleys petition alleges that Pamela was negligent in loaning her car to Melvin because she allegedly knew or should have known that he was a careless operator and because he did not have proper driver education and was only 14 years old. y Progressive moved for summary judgment based upon a specified driver exclusion endorsement to its policy on Pamelas car. The exclusion listed Melvin Alphonso. y The TRIAL court granted Progressives motion as to Melvin and in effect held that Progressive coult not be liable for the negligence of Melvin. The TRIAL court denied Progressives motion as to Pamela and held that progressive COULD be liable for the alleged negligence of Pamela. y But, the part of the exclusion that excludes coverage for Pamela is voided by the compulsory motor vehicle liability insurance statute. Because, under the Tradeaway v progressive northwestern rule

y

(case in which a specified driver exclusion that excluded coverage for the specified driver but also for an insured sued under a negligent entrustment theory.) coverage is excluded for Pamela and the Appellate court reversed the Trial courts judgment to the extent that it denied progressives motion for summary judgment and render judgment dismissing this action as against progressive. The Treadaway decision was rendered after the trial courts judgment, so it did not have the guidance of this case. So holding the insurer liable despite the statutory exclusion would be in direct conflict with the legislative intent of statute.

Duty to defend/ settle excess liability Every car liability policy will require the insurer to defend the insured in the event a claim is made. y The Duty to defend provisionallows the insurer to select an attorney of its choice to handle the negotiations and litigation of a case. If the claim does not exceed policy limits the insurer will be responsible for the full payment. It also requires the insurer to pay for the cost of the legal representation. y When the judgment value of the claim is in excess of policy limits, the insurer will try to settle the claim for policy limits and obtain a release of the insurer and the insured. y If a settlement and release of the insured cant be obtained, the insurer will advise the insured of the potential for a judgment in excess of the coverage and that the insured may want to retain his own private counsel. Uninsured Motorist Coverage (UM) y This coverage is designed to compensate the insured for her OWN personal injury damages as a result of the negligence or fault of someone who is uninsured. y Questions arise over this over issues like whether the injury arose out of the ownership, maintenance or use of the car. y Cases deal with whether injury resulted from the use of the uninsured automobile.

y

For the case Duvigneaud v. GEICO (dealt with a dog jumping out a parked car and ran out in the street and cause injury to someone riding a motor bike who hit the dog). Court found that Calecas negligence (owner of dog and car which dog was in) in failing to secure the animal arose out of the use of his car and therefore the injury was covered under Duvigneauds UM policy.

Carter v. City of Baton Rouge Case deals with the death of Carters 10 year old passenger of his car who drowned. This is a claim on liability insurance, not UM. The driver drove around a barricade which closed the interstate because of flooding. The child and driver were found 300-400 feet away from the car. The issue is whether the deal of the child arose out of the use of the car. y The insurer contended that since the body was found so far away from the car the drowning resulted from risks that should not be included within the scope of the drivers duties. The supreme court reversed the trial and appellate court and found that the death did arise from the negligent use of the vehicle. Collision/property damage: Collision insurance is to pay for the damage which occurs to the insureds vehicle (the drivers own vehicle). y Unlike liability insurance, collision protection is for the direct benefit of the insured, not a third party. Negligence or fault of the insured is not an issue. It does not matter who is at fault, the insurer is liable to pay for the property damage to the insureds car. y If a 3rd party caused the collision and the insurer paid the insured for the damage, his insurer would then be subrogated to the rights of the insured against the 3rd party. So the insurer, not the insured, would be liable to make a claim against the third party to recover the loss. Medical payments This insurance provides payment to the insured and his family and any occupants of the insureds car for medical expenses incurred as a result of an accident.

y y

As the case with collision insurance, the fault or negligence of the insured is not an issue. Also, as in collision coverage, the insurer will be subrogated to the rights of the insureds against a 3rd party who caused the accident to recover the payment.

Comprehensive auto coverage: Often includes the collision insurance but also covers property damage or loss regarding the insured auto for occurrences which are not related to the vehicle. y This usually covers a loss which occurred b/c of a fire, flood, or theft. Homeowners insurance These policies offers protection to the insured for liability claims by third parties and for property loss sustained by the insured. y Liabilitythe people insured are usually the residents of the house. The coverage is to protect the insured from claims which arise as a result of bodily or property damage to third parties, not the insureds. y If a visitor stepped in a hole in the yard and broke his foot or if a tree limb fell on a guests car, the liability protection would be applicable. Even if an insured accidentally injured a 3rd party on the premises, the policy would cover the insured. Exclusions in homeowner policies usually are: y Intentional acts y Use of cars boats recreational vehicles y Acts arising from other premises y Damage to the insured y Flood damage Property Coverage: This protection would normally address a loss to the insured which resulted from fire, theft, or severe weather, but not flood damage. y Flood damage protection is usually limited to $150000.

Umbrella Coverage: Policy designed to cover liability exposure which may exceed the policy limits of the auto or homeowner policy. It may also cover liability that would not be specifically covered by the auto and homeowner policies. Health and accident/hospitalization insurance: Provides protection for the insured with respect to medical and hospital expenses. This type of insurance is usually purchased by employers for employees. y It is rare for a health policy to pay for all medical treatment. Most policies require insured to pay a deductible each year before the insurer is obligated to pay. y The Duty to Payall claims under the health and accident contracts shall be paid not more than 30 days from the date upon which written notice and proof of claim. Life Insurance: y The insuredthe person whose life is being insured. y The beneficiarythe person who is listed on the policy as being entitled to the proceeds of the policy upon the death of the insured. y Owner of the policythe person who is described as the owner of the policy. y The insured is usually the owner of the policy. The owner has the right to borrow against the policy or to obtain the policys cash surrender value. o Separating the insured from any ownership interest is usually done to minimize death taxes in connection with estate planning. Insurable interest: y This is so life insurance does not become a business or gambling enterprise for the benefit of people who would otherwise not be impacted by the death of the insured. y The insured can have an economic interest in the life of the insured.like executives and CEOs of big businesses.

Exclusions: Most life insurance policies will have exclusions which would allow the insurer to deny payment on the policy if the insured died as a result of suicide within a specified time of the issuance of the policy. Usually about 2 years. The policies also usually contain provisions that allow the insurer to deny payment if the insureds health was misrepresented at the time of the application for the insurance. Community property: Life insurance proceeds from a deceased spouse payable to a beneficiary is NOT part of the community. A surviving spouse who was not the beneficiary of a policy for her husband may only have an action against the deceaseds property for an accounting with respect to community funds which were used to pay the premiums. Viatical Settlement Act: Basically a viatical broker will buy, at a discount, for himself or another a life insurance policy from someone who is expected to die within the foreseeable future. y The insured gets the benefit of the sale proceeds while alive and the purchaser obtains the profit from the difference in the price and the policy benefits at the insureds death. So you are basically selling your life insurance policy NOW to get the money NOW because you want it, or because you need to pay for medical expenses for the person expected to die. And if that person does not die, then it was a gamble that the broker lost on. y There are laws that provide for specific amounts/discounts that must be paid on the sales. o If life expectancy is less than 6 months, a min of 80% of the face value of the policy must be paid. If expectancy is between 6-12 months, 70%.

3/4/2010 1:36:00 PM

3/4/2010 1:36:00 PM