Professor Steenson, No-Fault Auto Insurance, Fall 1986
INSTRUCTIONS
1. The examination is two (2) hours long (120 minutes). It consists of 28 short-answer questions.
2. Please write only your exam numbers on your bluebooks.
3. Please number your bluebooks, e.g., 1 of 3, 2 of 3, 3 of 3.
4. When the test is over please place your bluebooks and exam in the box in the front of the room. Do not write after the time has terminated. If you do you are obtaining an unfair competitive advantage.
5. Be sure to explain the reasons for the conclusions you reach.
6. Rely on the following assumptions in writing the exam unless stated otherwise:
1. Plato was a cab driver in Minneapolis. The cab was insured as required by the Minnesota No-Fault Automobile Insurance Act. Plato was shot by a passenger he picked up one evening when he refused to give the passenger money. Is Plato entitled to recover basic economic loss benefits for the expenses he incurred because of the gunshot wound?
2. Smith, a farmer, owned a pickup truck that was properly insured as required by the Minnesota No-Fault Automobile Insurance Act. Smith wanted to paint his barn, so he rigged up a hoist that was raised and lowered by the pickup truck being driven back and forth. Smith was on the hoist while the pickup truck was being driven by his brother. The rope attached to the pickup truck broke, and Smith fell to the ground, sustaining serious injuries. Is Smith entitled to recover basic economic loss benefits for his injuries?
3. Jones was changing the sparkplugs on her car, which was parked in the street outside her house, when she cut her hand on part of the engine when she withdrew her hand after replacing one of the sparkplugs. The cut necessitated medical treatment. Her car was insured as required by the Minnesota No-Fault Automobile Insurance Act. Is Jones entitled to basic economic loss benefits for the expenses she incurred?
4. Jane was a passenger on a motorcycle driven by Howard. Howard approached an intersection too fast and applied the brakes too hard, causing Jane to be thrown from the motorcycle. A split second later Jane was run over by a motor vehicle approaching the intersection from the other direction. Jane owned her own motor vehicle, which was properly insured as required by the Minnesota No-Fault Automobile Insurance Act. Is Jane entitled to recover basic economic loss benefits for the expenses she incurred?
5. Fred was a passenger on a Metropolitan Transit Commission bus when the bus collided with a truck. The accident occurred in December of 1986. Fred sustained injuries necessitating medical treatment. Fred owned his own motor vehicle, which was properly insured as required by the Minnesota No-Fault Automobile Insurance Act. The bus was also properly insured. From what source or sources is Fred entitled to recover basic economic loss benefits for the medical expenses he incurred?
6. Sam took his car to the Fixit Garage for repairs on the transmission. While the car was on a hydraulic hoist, Sam walked underneath the car to see what repairs were being made, when the hoist slipped, dropping the car on Sam. Sam sustained injuries and consequent medical expenses. Is Sam entitled to recover basic economic loss benefits for the medical expenses he incurred?
7. Ethel owned a .357 magnum handgun, which had a hair trigger. Ethel loved to hunt small animals with the gun. Ethel particularly loved to hunt animals while driving her jeep. One day Ethel and her friend, Merman, went hunting. They were driving off the road, over rough terrain. Ethel was holding the gun in her right hand, when the jeep hit a bump, causing the gun to discharge. The bullet struck Merman, causing her serious injuries. Merman incurred significant medical expenses. Ethel's jeep was insured as required by the Minnesota No-Fault Automobile Insurance Act. Ethel also had a homeowner's insurance policy which covered her for sums she was legally obligated to pay third persons. The homeowner's policy excluded damages arising out of the maintenance or use of a motor vehicle. Which source or sources of insurance will cover Ethel if she is sued by Merman?
8. Barwell was injured when the vehicle she was driving was struck by a vehicle driven by Crane. Barwell's vehicle was properly insured. The vehicle Crane was driving was owned by Davis. However, Davis did not halve the insurance coverage required by the Minnesota No-Fault Automobile Insurance Act. Crane owned his own motor vehicle, which was insured as required by the Minnesota No-Fault Automobile Insurance Act. Crane's liability insurance covered him while driving other vehicles. Is Barwell entitled to recover uninsured motorist insurance benefits from her own insurance company under these circumstances?
9. Ford, a vice president of the Ladder Company, was provided a car to use for business and personal purposes. The car was insured as required by the Minnesota No-Fault Automobile Insurance Act. One day, on his way home, Ford picked up a hitchhiker, Gray. Gray did not own a motor vehicle. Before he could drop Gray off, Ford was involved in an accident that resulted in injury to Gray. Gray incurred medical expenses as a result. From what source or sources is Gray entitled to recover basic economic loss benefits?
10. John was injured in a motor vehicle accident. His motor vehicle was properly insured as required by the Minnesota No-Fault Automobile Insurance Act. John was out of work for three days as a result of the accident. His gross wage was $1,000 per week, and his total wage loss for the three days he missed work was $600. He made a claim for disability and income loss benefits against his insurer. His insurer argued that it was obligated to pay only $150, claiming that the maximum weekly benefits of $250 could be prorated to require compensation in the amount of no more than $50 per day per work week. What result? Assume that the accident occurred in 1986.
11. Joan was injured in an accident while driving her own motor vehicle. The vehicle was insured as required by the Minnesota No-Fault Automobile Insurance Act. Joan also owned another motor vehicle, also properly insured. Joan had medical expenses in excess of $40,000. Joan sought coverage under the coverages on both vehicles. Is she entitled to both coverages?
12. Baker was injured in a motor vehicle accident while a passenger in a motor vehicle owned by Smith. Baker owned a motor vehicle that was properly insured as required by the Minnesota No-Fault Automobile Insurance Act. Smith's vehicle was also properly insured. The accident occurred when Smith's vehicle was hit by an uninsured motor vehicle. Baker's injuries were serious. Following exhaustion of his basic economic loss benefits, Baker sought to recover uninsured motorist insurance benefits. From what source or sources is Baker entitled to recover uninsured motorist insurance benefits? Assume that the accident occurred in 1984.
13. Able was injured in a motor vehicle accident. She made a claim for benefits against her insurance company, but the company refused payment for two months after Able submitted reasonable proof of the fact and amount of her claim for basic economic loss benefits. Able made a claim for both the statutory interest penalty and prejudgment interest in the action against her insurer in state district court. Is she entitled to both types of interest?
14. Able also made a claim for punitive damages based on the company's willful failure to pay benefits. Is she entitled to recover punitive damages in the action against the insurance company?
15. Helen sustained serious injuries in an accident involving two other vehicles. One of the vehicles was properly insured and the other vehicle was uninsured. Helen's vehicle was properly insured as required by the Minnesota No-Fault Automobile Insurance Act. Helen recovered basic economic loss benefits from her own insurer, but still had uncompensated damages in excess of $100,000. Is she entitled to recover both uninsured and underinsured motorist insurance benefits from her own insurer? Assume that the accident occurred in 1984.
16. Assume the same facts as in the preceding question, except that the accident occurred in 1986. Is Helen entitled to recover both uninsured and underinsured motorist insurance benefits?
17. In 1986 Harper was injured when his car was hit by a car owned by Gray. Both cars were insured as required by the Minnesota No-Fault Automobile Insurance Act. Harper settled with Gray for Gray's policy limits of $30,000, and then sought to recover underinsured motorist insurance from his own insurance carrier. Harper had underinsured limits of $25,000 bodily injury per person with a $50,000 per accident limitation. Is Harper entitled to recover underinsured motorist insurance?
18. Banks was injured when the car he was driving collided with a car driven by Paul. Banks was completely at fault in causing the accident. The car Banks was driving had been borrowed from Stark. Stark's car was insured as required by the Minnesota No-Fault Automobile Insurance Act. Stark had allowed Banks to borrow the car one morning so that Banks could go to the hardware store to get some paint so Banks could paint his house. After getting the paint Banks decided to go for a drive in the country. It was then that the accident occurred. Is Stark's insurance company obligated to provide liability insurance coverage for Banks if Banks is sued by Paul?
19. Howard owned two motor vehicles, both insured as required by the Minnesota No-Fault Automobile Insurance Act. While driving one of his cars Howard was involved in an accident with Pete. The accident was Howard's fault. Under these circumstances is Howard entitled to liability insurance coverage under the coverages on both of his motor vehicles?
20. Parker was injured in a motor vehicle accident while riding with his daughter-in-law, who was driving. Her car was properly insured as required by the Minnesota No-Fault Automobile Insurance Act. The car was hit by a hit-and-run motor vehicle. Parker did not own a motor vehicle. His daughter-in-law, Rachel, owned the motor vehicle in which Parker was riding as well as a second motor vehicle, which was also properly insured. Parker did not reside with his daughter-in-law. Parker sought to recover uninsured motorist insurance benefits from the coverage on both of Rachel's motor vehicles. Is he entitled to such coverage? Assume that the accident occurred in 1984.
21. Curt was injured in an accident while riding in Bill's motor vehicle. The accident occurred when Bill's vehicle was hit by a vehicle driven by Smith, who was not insured. Curt owned his own motor vehicle, which was insured as required by the Minnesota No-Fault Automobile Insurance Act. Curt recovered basic economic loss benefits from his own insurer and then sought to recover uninsured motorist insurance benefits. Curt carried uninsured motorist insurance coverage in the amount of $50,000 bodily injury per person with a $100,000 per accident limit. Bill's limits were $25,000 per person with a $50,000 per accident limit. From what source or sources is Curt entitled to recover uninsured motorist insurance benefits and in what amount? Assume that the accident occurred in 1986.
22. Able was injured in an accident when his Ford crashed because of a defective steering wheel. As a result, Able was out of work for six weeks. His wage loss during that time was $1,000 per week. His no-fault insurer paid him $250 per week during that time period. Able also had $3,000 in medical expenses, which were also paid by his no-fault insurer. In a strict liability suit against Ford Motor Company for economic loss and pain and suffering, what impact will the no-fault act have on Able's right to recover? What damages will Able ultimately be entitled to recover?
23. Kelley was driving his own motor vehicle when he was involved in a collision with a vehicle owned and driven by Meyer. Kelley was injured in the accident. He incurred medical expenses and was out of work for several weeks. His insurer paid him $10,000 in disability and income loss benefits and $10,000 in medical expense benefits. In a negligence action against Meyer the jury found that Kelley had economic losses, including wage loss and medical expenses, of $20,000, and damages for pain and suffering totaling $20,000. The jury also found that Kelley was 40 percent at fault in causing the accident and Meyer was 60 percent at fault. What damages is Kelley entitled to recover in his action against Meyer?
24. Baker was injured when the car he was driving was hit by a car driven by Carlson. Both cars were insured as required by the Minnesota No-Fault Automobile Insurance Act. The accident was entirely Carlson's fault. In a negligence action against Carlson the jury awarded Baker $10,000 in past medical expenses and $15,000 in future medical expenses, and $50,000 in pain and suffering. Baker previously received $10,000 in medical expenses from his no-fault insurer. What impact will the no-fault act have on Baker's right to recover basic economic loss benefits for any future medical expenses he might incur?
25. Owen was a resident of Missouri. He owned a motor vehicle that was insured with liability insurance limits of $15,000 bodily injury per person with a $30,000 per accident limit. Owen was insured with Allstate Insurance Company, which is licensed to do business in Minnesota. Owen was driving to Minnesota to visit a friend. Just before he got to the Minnesota border his car stalled. Owen walked across the border into Minnesota to get help from a towing service when he was struck by a car owned and driven by Keeton. Keeton was a Minnesota resident and his vehicle was properly insured as required by the Minnesota No-Fault Automobile Insurance Act. Owen sustained injuries in the accident, necessitating medical treatment. From what source is Owen entitled to recover basic economic loss benefits to cover his medical expenses?
26. Joan was injured when the car she was driving was hit by Bill. Bill was negligent in causing the accident. Bill's insurer paid Joan the policy limits under Bill's liability insurance coverage. Joan then sought to recover underinsured motorist insurance benefits. Joan's car was insured as required by the Minnesota No-Fault Automobile Insurance Act. Her insurer paid her underinsured motorist insurance benefits under her own coverage. Joan then sought to recover underinsured motorist insurance benefits under a policy covering a car her parents owned. Joan was a resident in her parents' household. However, Joan's parents' policy had an exclusionary clause which excluded coverage under the policy for injuries sustained by any resident relative who was identified by name in another contract of insurance. Is the exclusionary clause valid so as to bar Joan from coverage under her parents' under insured motorist insurance coverage? The accident was in 1984.
27. Stan owned two motor vehicles, only one of which was insured as required by the Minnesota No-Fault Automobile Insurance Act. Stan was injured in an accident in 1986 when he was driving his uninsured car. The car was hit by another uninsured motor vehicle. Is Stan entitled to recover uninsured motorist insurance under the coverage on his insured motor vehicle?
28. Bill was injured in an accident while driving his own motor vehicle, which was insured as required by the Minnesota No-Fault Automobile Insurance Act. Bill received disability and income loss benefits for three months, during which time he was unable to work at his regular job as a steel worker. When he was certified as able to return to work by his physician his job had been filled. He was unable to find any equivalent employment for two months. Is Bill entitled to recover disability and income loss benefits for that two-month period?