TIPS 75th Anniversary

The Tort & Insurance Law Jounal

Spring 2001
Volume 36, Number 3

Table of Contents


Doctors, HMOS, ERISA, and the Public Interest After Pegram v. Herdrich
Jeffrey W. Stempel and Nadia von Magdenko

Bond Claims and the Impact of the Uniform Electronic Transactions Act, the Uniform Computer Information Transactions Act, and Other Technological Developments
Toni Scott Reed

Peril and Fortuity in Property and Liability Insurance
Kenneth S. Abraham

Jurisdictional Issues in Cyberspace
Michael J. Weber

Clients, Their Confidences, and Internet Communications

Lisa A. Dolak

The Law of Closing Protection Letters
James Bruce Davis

The Case for Continuing to Award Punitive Damages
Lori Woodward O'Connell


Abstracts

Doctors, HMOS, ERISA, and the Public Interest After Pegram v. Herdrich
Jeffrey W. Stempel and Nadia von Magdenko

This article examines and circumstances and legal foundation of Pegram v. Herdrich and suggests that everyone would be better served by taking one further step in ERISA analysis: simple differentiation between the core administration of the ERISA plan itself and the provision of services on behalf of an ERISA plan. After a brief introduction, Part II summarizes the history and background of ERISA and of ERISA preemption litigation in the 1980s and 1990s as well as the rapid growth and corresponding controversy surrounding HMOs. Part III describes the Pegram litigation and the U.S. Supreme Court's decision. Part IV applies Pegram to ascertain the current status of HMO and physician liability today, and provides a template for assessing the viability of such claims. Part V develops the suggested alternative means of determining the status of HMOs vis-à-vis federal and state claims made by aggrieved patients.

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Bond Claims and the Impact of the Uniform Electronic Transactions Act, the Uniform Computer Information Transactions Act, and Other Technological Developments
Toni Scott Reed

This article features a detailed analysis of the Uniform Electronic Transactions Act (UETA), the Electronic Signatures in Global & National Commerce Act, and related state legislation. The article also focuses on provisions of the fidelity bond that may be affected by the electronic transaction legislation and the way in which the new statutes may affect future claims for losses. Among the specific coverage issues addressed are employee dishonesty, on premises/in transit, theft, destruction, and disappearance, forging and alterations, and securities. The article also includes a useful appendix of state laws to implement the UETA.

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Peril and Fortuity in Property and Liability Insurance
Kenneth S. Abraham

The purpose of the article is to identify the conditions under which the proposition that both property and liability insurance cover only the risk of fortuitous loss is correct, and thereby to isolate the points at which the force of the fortuity requirement runs out and necessarily becomes inapplicable. It concludes that the characteristic feature of insurance policies, their standard-form nature, strongly supports an interpretive approach that emphasizes the primacy of insurance policy language and relegates legal rules to a secondary position in the interpretive enterprise. For this reason, the courts should be wary of employing so-called rules regarding insuring against nonfortuitous loss. Rather, to determine whether there is coverage under an insurance policy whose provisions address the fortuity issue, the courts should apply the policy language.

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Jurisdictional Issues in Cyberspace
Michael J. Weber

With the Internet now being used by more than 200 million people worldwide, the courts are increasingly faced with determining whether defendants can be reasonably and fairly subjected to personal jurisdiction outside their home state. The seminal case is Zippo Manufacturing Co. v. Zippo Dot Com, Inc. In Zippo, the U.S. District Court for the Western District of Pennsylvania used a three-part sliding scale to differentiate among the following categories in deciding whether to exercise jurisdiction: (1) those defendants conducting business over the Internet with residents of the forum; (2) those defendants operating an interactive website in which users exchange information with the host computer; and (3) those defendants posting information on a website that is accessible to users in all states. The article addresses a series of other factors often considered by the courts, including number of Internet contacts, passive websites, and websites that allow users to exchange information with host computers. Also examined are Internet activities directed in a targeted manner to cause harm and intellectual property issues.

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Clients, Their Confidences, and Internet Communications
Lisa A. Dolak

The propriety of using e-mail for client communications has received a great deal of attention from commentators and ethics authorities over the past five years. Most agree that, absent special circumstances justifying a heightened level of care, the use of unencrypted e-mail does not raise ethics, evidentiary, or liability concerns. Nevertheless, the author suggests a number of precautionary steps to prevent inadvertent disclosure of confidential information, including (1) know the applicable law and rules; (2) investigate and monitor technological solutions; (3) ask clients for instructions; and (4) use confidentiality notices.

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The Law of Closing Protection Letters
James Bruce Davis

Despite the importance of closing protection letters in mortgage lending and real estate transactions, relatively few court decisions illuminate the meaning of closing protection letters, and significant questions remain unanswered regarding the scope of a title insurer's liability, the measure of damages, and the rights of third parties to rely on closing protection letters. This article explores those questions, together with such related topics as the risk of loss in the absence of a closing protection letter, the nature of the title insurer's obligation under a closing protection letter, and whether a closing protection letters constitutes insurance. It also considers the scope of a title insurer's right to recover from third parties for losses paid under a closing protection letter.

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The Case for Continuing to Award Punitive Damages
Lori Woodward O'Connell

In Anderson v. General Motors Corp., the jury awarded $4.8 billion in punitive damages after finding that General Motors Corporation was negligent and strictly liable for injuries caused by the defective design of the fuel tank in GM's Chevrolet Malibu. In reaction to this award, tort reformers have rekindled their arguments that states should the amounts and kinds of damages that can be awarded. This article analyzes the rhetoric espoused by those arguing for caps or limitations on punitive damages, and suggests that not only are these tort reform arguments based on invalid grounds, but also that artificial caps on punitive damages will fail to rectify the putative problems. In addition, this article will demonstrate that there already exists within our judicial system measures that ensure that punitive damages are reasonably awarded.

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The Tort and Insurance Law Journal


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