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Family Auto Repair (FAR) hired Marty Anderson for a position in their auto body shop in Memphis. Three months later, FAR promoted Marty and transferred him from Memphis to their new facility in Jackson, 90 minutes from Marty’s house. Marty continued to live in Memphis and commuted 90 minutes each way to work. Although Marty owned his own car, FAR allowed him to use a company-owned pickup truck to commute to and from work. Once or twice a week, Marty either picked up parts at the Memphis shop on his way to work and delivered them to Jackson, or he dropped off parts from Jackson at the Memphis shop on the way home. With his boss’s knowledge, Marty also used the FAR truck during working hours to run some personal errands. After Marty left work in the company truck on a Friday, he delivered parts to the Memphis facility at 6 p.m. Marty stopped to pick up a pizza and then drove to his brother’s house, which was about ten miles from his home. Marty ate the pizza with his brother, drank a few beers, and fell asleep. At 1 a.m., Marty woke up and drove the truck to a store to buy some cough medicine for his brother’s little boy. On the way back to his brother’s house, Marty fell asleep at the wheel and hit another car, severely injuring himself and Steve Spritzer, the other driver. After the driver sued Marty and FAR, FAR’s insurance company refused to cover Marty or to defend or indemnify him in the lawsuit. Marty then sued the insurance company and FAR. The insurance company argued that Marty was not an “insured” under its policy with FAR because he did not have permission to use the truck when the accident occurred.

The insurance policy defines an insured as “[a]nyone else while using with your permission a covered auto you own, hire, or borrow. . . .” 

“Permission” is “consent to use the vehicle at the time and place in question and in a manner authorized by the owner, either express or implied.”

  • Ignoring the issue of insurance, is the FAR liable for the injuries sustained by Spritzer under respondent superior?
  • Did Marty have implied permission to use the truck?
  • Is FAR (and therefore the insurance company) liable for damages arising out of the accident? If so, on what basis?

Scenario 2  

Casey’s infant daughter was injured when the nightshirt she was wearing caught fire. Casey explains that she has heard about alternative dispute resolution and asks you which type would result in a quicker judgment in her favor because she does not particularly want to go to the time and expense of a court action.

  • Identify three types of ADR and explain the advantages and disadvantages of each.
  • Select the type of ADR best suited for Casey’s situation and support your answer.
  • The manufacturer involved in the ADR insists on a confidentiality agreement.  Discuss the advantages and disadvantages of the company requiring a confidentiality agreement in which the parties agree not to disclose the terms of the settlement.

Scenario 3  

Electro Cart manufactures electronic four-wheeled vehicles normally used by golfers to transport golf clubs and up to four people across the golf course. Referred to as low speed vehicles (LSV), the carts are capable of traveling up to a maximum speed of 15 miles per hour.

When Frank Brown, the president of the company, visited his father in an upscale retirement development in Arizona, he noticed many residents used golf carts to get around and visit other residents in the neighborhood. After talking with his father, Frank discovered that their golf carts were capable of going 25 miles per hour.

Electro Carts has also received requests for golf carts that would travel 35 miles per hour and meet regulations for street use.

  • Are Electro’s current vehicles subject to NHTSA regulations? Why or why not?
  • If Electro manufactures carts capable of going 25 to 35 miles per hour, will they be subject to the NHTSA regulations? Why or why not?
  • Using the state of Arizona, Florida, or your own state, find a state or other local ordinance that specifically permits or prohibits the use of LSVs on public roads and explain the provisions of the regulation.
  • Discuss the pros and cons for allowing golf carts to use public roads.
joycePosted inUncategorized