by James Daily
Property Damage and Insurance
If there’s one thing that almost all comic books have in common, it’s that at some point there is probably going to be an absolutely insane amount of property destruction. Nitro takes out a huge chunk of Stamford, Connecticut, in the first issue of Marvel’s Civil War event, and the final battle does significant damage to downtown Manhattan. Doomsday carves a path of destruction through three states in DC’s Death of Superman story back in the early 1990s. The Incredible Hulk does a complete number on Stark Tower in World War Hulk and causes Manhattan to be evacuated, disrupting the operations of tens of thousands of businesses on the island. 32 Even something as innocuous as the Flash’s running across town can create sonic booms that leave a trail of broken windows in his wake.
Liability isn’t the only aspect of tort law. The other big part is damages. Most of the time when property is damaged, the property owner has insurance that will pay to restore the property to approximately the state it was in before the loss occurred. 33 But when the Joker blows up half of downtown Gotham just for the hell of it, insurers aren’t actually going to want to pay for that, and there is reason to believe that under the terms of standard insurance contracts, they wouldn’t have to. The reason has to do with the way insurance policies are written, which is a matter of contract as much at it is a matter of law.
Understanding this involves a little intro to insurance. Insurance, technically speaking, is a financial product whereby risk is transferred from one person, the “insured,” to another, the “insurer,” in exchange for a sum of money, called the “premium.” Insurance policies are only written for “insurable risks.” Generally speaking, an “insurable risk” is one where both the probability and magnitude of a particular kind of loss are measurable, where the occurrence of that loss is truly random, and where it is possible to transfer that risk to an insurer for an economically feasible premium. A common example of an insurable risk is one’s house burning down. We know how often houses in a particular zip code burn down, we know what a particular house is worth, houses don’t burn down at any predictable frequency, and as it turns out, it’s possible to insure against the risk of fire for a premium that is both acceptable to the insured and profitable for the insurer. Keeping track of all of those statistics and figuring out the appropriate premium for a particular risk is what actuaries do for a living. Some fun, eh?
Flooding, on the other hand, is an example of an “uninsurable” risk. Floods do occur at random, and we know basically how often, but the magnitude of losses caused by flood are such that it is impossible to offer flood insurance at any price a homeowner can afford. Floods are considered “catastrophic” losses, because they cause both a high amount of damage to individual properties but also a high amount of damage to entire regions, making it impossible to adequately spread the cost to other property owners, since they all get hit too. We’ll talk more about how uninsurable risks like flooding are covered later in this section.
The reason this is important for comic books is that the same is true of war, terrorism, civil unrest, revolution, etc. Discharge of nuclear weapons, intentional or accidental, is also uninsurable. This is starting to sound a lot like a comic book, isn’t it? And here’s the thing: uninsurable risks are generally excluded from insurance policies.
When a loss occurs, the claims adjuster is going to look to the policy to see if there’s coverage. First, he’ll look to see if there is coverage for this kind of loss on the declarations page, i.e., the coverage scheduled for this particular policy. For example, a liability policy is not going to have coverage for property losses, and vice versa. Then, he’s going to check the insuring agreement to see if the loss results from a “covered peril.” 34 Some policies cover losses from any peril that isn’t excluded, others only cover losses from a particular list of perils. Then, he’s going to check to see if there are any relevant conditions in the policy that have been breached, like failing to pay the premium or refusing to cooperate with the adjuster. Finally, he’ll see if there are any relevant exclusions, e.g., fire is generally a covered peril, but there’s no coverage if a homeowner burns down his own house.
Take the Doomsday example again, and let’s assume that he has just leveled a private residence, insured by ABC Ins. Co., by throwing Superman through it. ABC’s adjuster is first going to look at the declarations page for the insured’s homeowner’s policy. The house is insured for $100,000. So far so good. Then, he’s going to look at the insuring agreement to see if there is anything of interest there. This policy covers everything not specifically excluded, so again, so far so good. Then he’ll check conditions. The homeowner is current on his premium, gave timely notice of the claim, and is cooperating with the adjuster, so again, probably okay there.
But what’s this? The homeowner didn’t buy terrorism coverage? Hmm. That’s going to be a problem because it’s going to be pretty easy to argue that Doomsday is a terrorist. Even if he isn’t, it isn’t going to be difficult to fit this into either the war or civil unrest exclusions, both of which are part of every insurance policy. Any coverage attorney worth his salt would certainly make that argument, and it’s hard to see why it wouldn’t win. Heck, if Superman is working for the government, then it might be excluded under the “civil authority” exclusion.
In a world where central business districts are regularly leveled by marauding supervillains and the superheroes who fight them, this hardly seems like a positive result. If we’re talking about a universe where superheroes and supervillains exist and unstoppable monsters do level significant sections of town every other Tuesday, it seems probable that the legal system or insurance industry would take this into account. But because the magnitude of losses caused by superhero battles are so great, it seems likely that the states would have to resort to what are called “residual market mechanisms.”
And in fact, this is how flood insurance is currently offered on a national level: the Federal Emergency Management Agency operates the National Flood Insurance Program. This is pretty much the only way to buy flood insurance anymore. States have also set up residual markets for both high-risk drivers and properties with significant windstorm exposures (Mississippi, South Carolina, Texas, etc.), earthquake exposures (California), and for high-risk drivers (every state). Basically, state legislatures have decided that even though certain kinds of risk are impossible to insure against on the open market, we want people to take those risks anyway, for a host of possible reasons. We want high-risk drivers to be insured both for their protection and for others’, and denying someone permission to drive because he cannot buy mandatory insurance seems unjust. People really want to live in earthquake- and hurricane-prone areas, and those people vote, so we’re going to find some way of making that work, no matter how silly it is.
Residual markets can work in one of a number of ways. One is “assigned risk,” an approach frequently used to ensure that high-risk drivers have access to at least the state minimum liability limits for personal auto insurance. Basically, every insurer that participates in the market is required to take its fair share of high-risk drivers as a cost of doing business in the state. It can then spread this cost to its other insurance customers, keeping the company profitable.
But it seems more likely that the states would create their own “Supervillain Pool” similar to the windstorm pools active in the Gulf and coastal states. The way windstorm pools work is that every insurance policy is assessed a tax, based on the premium, which goes into the residual pool. The pool then reimburses property owners for damages caused by hurricanes. Property owners in comic book stories would need to buy “Superhero/Supervillain Insurance” from a pool, set up for that purpose though that premium would be a good start because this truly is an uninsurable risk; the pool will probably need to be supported by taxpayer revenue as some windstorm pools are. The idea is that all but the biggest losses will be at least mostly absorbed by the pool but that the government will step in if things get rea
lly out of hand. The pool can theoretically up its rates in the years following a big loss to ensure that the government gets its money back, but this rarely happens.
In the Marvel Universe, this is basically how things work. Individuals and businesses can purchase Extraordinary Activity Assurance (EAA), which is essentially superhero insurance. In New York City, large claims or claims by people who can’t afford EAA are backed up by the (fictional) Federal Disaster Area Stipend.
Of course, while we’re modifying the law to account for superheroes, it would probably also be the case that insurance companies would include some kind of “superhero/supernatural/paranormal” exclusion, shifting that exposure more directly to the residual pool, as has been done with flood, earthquake, and windstorm exposures. However, as much as it might make sense to require superheroes to use their powers to help repair the damage they cause, the Thirteenth Amendment makes it pretty difficult for the states to impose forced labor on people not convicted of a crime or drafted into the military. On the flip side, if a superhero is sued for causing damage, he might be able to significantly reduce the settlement amount by voluntarily agreeing to use his powers in the repair efforts.
1. Dan Slott et al., Web of Lies, in SHE-HULK (VOL. 1) 4 (Marvel Comics August 2004). This does not go exactly as planned, but more on that later.
2. Dan Slott et al., Minor Complications, in SHE-HULK (VOL. 1) 6 (Marvel Comics October 2004).
3. Note that this is entirely different from the “right to privacy” recognized by the Supreme Court in Griswold v. Connecticut, 381 U.S. 479 (1965), in which the Court recognized a constitutional right to privacy. That case, and the cases that stem from it, have to do with governmental intrusion into arguably private affairs. Here, we discuss the law related to individual intrusion into the privacy of other individuals. The Constitution does not really apply to these cases. Remember the state actor doctrine.
4. RESTATEMENT (SECOND) OF TORTS § 652A. Restatements of the law are scholarly works that attempt to set forth the majority position on particular areas of law or recommended changes to the majority position. They mostly cover subjects that are still primarily common law rather than those based on legislation. The Restatements are not laws themselves, but courts often find them persuasive, and many sections of various Restatements have been adopted as law by state courts.
5. 435 So. 2d 705 (1983).
6. RESTATEMENT (SECOND) OF TORTS at § 652B.
7. Id. at 711.
8. William Prosser, Privacy, 48 CALIF. L. REV. 383, 397 (1960).
9. Roe ex rel. Roe v. Heap, 2004 Ohio 2504, (Ohio Ct. App. 2004).
10. Note that if the telepath violated the injunction, then he or she could be found in contempt of court and subjected to a substantial fine, even if the actual damage done was still minimal. The fine would be paid to the court, however, and not the victim.
11. The ordinary person standard strikes again.
12. If they aren’t included then they may be waived.
13. This is just another reason why masked superheroes are problematic for the Rules of Evidence.
14. Which is probably a violation of the rules of civil procedure. Any potential defendants need to be named in the pleadings and properly served. Trial is far, far too late in the litigation process to be naming additional parties.
15. RESTATEMENT (SECOND) OF TORTS § 652D.
16. Diaz v. Oakland Tribune, 139 Cal. App. 3d 118, 126 (Cal. Ct. App. 1983).
17. The logo would probably be protected by trademark, which is discussed in Chapter 9, but (real) names and faces are not, and in the context of the Marvel Universe, the Fantastic Four are real, rather than fictional, people.
18. PETA v. Bobby Berosini, Ltd., 895 P.2d 1269 (Nev. 1995) (emphasis in original).
19. RESTATEMENT (SECOND) OF TORTS § 652C.
20. MCCARTHY, 1 RIGHTS OF PUBLICITY AND PRIVACY § 5:60.
21. RESTATEMENT (SECOND) OF TORTS § 652E.
22. Burglar’s family awarded $300,000 in wrongful death suit, COLORADO SPRINGS GAZETTE (August 26, 2011), available at http://www.gazette.com/articles/jury-123946-burglar-lot.xhtml.
23. We focus here on characters whose powers are somehow part of their bodies, not technological in nature. Batman and the Punisher, for example, are really just ordinary men in peak physical condition who happen to have access to awesome technology. This is quite different, legally speaking, from having one’s body affected by an accident.
24. Stan Lee, Jack Kirby et al., The Fantastic Four!, in FANTASTIC FOUR 1 (Marvel Comics November 1961).
25. For example, think of signing a waiver before going skydiving. Note, though, that there are some things that can’t be waived or consented to, such as intentional serious harm or death caused by the defendant, which is something that will come up when we discuss the Hulk’s origin.
26. Obi-Wan Kenobi in Star Wars: A New Hope (1977).
27. Probably a thinly veiled reference to Exxon.
28. Dan Slott et al., Class Action Comics!, in SHE-HULK (VOL. 1) 2 (Marvel Comics June 2004).
29. Which is probably a question of law for the court rather than a question of fact for the jury, contrary to the way the story goes in the comic.
30. See chapter 7 and, umm, good luck with that.
31. “Tortfeasor” is a fancy term for “someone who commits a tort.”
32. “Business interruption insurance” is a real thing.
33. In theory the property owner could sue the tortfeasor, but there are several problems with this. For one thing, lawsuits are expensive, time-consuming, and uncertain. For another, many defendants are in no position to pay for their damages (i.e., they are “judgment proof”). Usually it’s simpler to take out an insurance policy and let the insurance company sue the tortfeasor if it makes financial sense to do so.
34. In insurance terms, a “peril” is anything that causes loss. So lightning, fire, flood, etc. are all types of perils.
CHAPTER 6
Contracts
In the 1999 Batman story arc No Man’s Land, Gotham City is rocked by a massive earthquake and fire. Low on options, Batman hires mobsters and thugs—mostly working for the Penguin—to help find and assist survivors. To ensure their cooperation, he writes a contract. Unfortunately, we don’t see the whole contract, but the parts we do see are sound, if maybe a little questionably written. Under the circumstances Batman can probably be forgiven a little loose writing!
Over the course of the story, several details of the contract emerge. Ultimately the deal is simple: The villains help the survivors in exchange for payment, and Batman promises not to spend the rest of his life making their lives as miserable as he can. The contract is very specific about how the work is to be performed: the villains can’t use guns, they have to work together, and they have to be careful not to harm the survivors or each other.
Contracts are an important part of our daily lives, but they come up more rarely for superheroes. Not too many superheroes and supervillains seem to have lease agreements for their secret hideouts, for example! But this contract in No Man’s Land, as it turns out, is a valid contract. 1 A contract has three major elements: an offer, an acceptance, and consideration. This contract has all three. The first two, together, are sometimes referred to as a “meeting of the minds,” meaning, a mutual understanding between the parties about a particular subject, the consideration.
Batman used a contract to secure the help of the Penguin and his goons in the aftermath of the earthquake that destroyed Gotham. We might have advised him to leave off the “From the Desk of Bruce Wayne” part, though! Devin Grayson et al., The Contract, in BATMAN CHRONICLES (VOL. 1) 12 (DC Comics Spring 1998).
Batman offers the Penguin “good and valuable consideration” in the form of agreeing not to make his life miserable. We’d certainly take the deal. Alan Grant et al., Cataclysm, Part Nine: The Naked City, in BATMAN: SHADOW OF THE BAT 74 (DC Comics May 1998).
The Offer
An offer is a promise to
do something in exchange for something else (i.e., the “consideration,” more on that later). The offer must clearly manifest the intent of the offering party to be bound by the terms of the offer should the particular person to whom it is offered accept (more on that in a minute). So, for example, an advertisement to the general public simply saying that a particular product is available for a particular price is not an “offer” in the technical sense, because there is no particular person to whom the offer is made. But an advertisement that says that only five of an item are for sale and that the first five people to show up have a right to pay a particular price is different. That’s definite enough to constitute an “offer,” and the first five people who show up can demand that they be sold the item for the advertised price. 2
Of particular interest for comic book stories is the issue of bounties. Bounties are advertisements that the government—or some other entity—is willing to pay a certain amount of money for the apprehension of a particular person. 3 But despite the fact that the offer is theoretically made to the entire public, the fact that only the first person (or persons) who bring the criminal in can collect the bounty makes bounties definite enough to be offers in the contractual sense. This is significant for a number of superheroes, particularly Superman, who in one story 4 makes a significant amount of money (most of which he donates to charity) collecting bounties on various criminals.
