DOCSLIB.ORG

Duty of Disclosure for Insurance Contracts: a Comparative Note of the United Kingdom and Indonesia

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Duty of Disclosure for Insurance Contracts: a Comparative Note of the United Kingdom and Indonesia Corporate and Trade Law Review Volume 01 Issue 01 January = June 2021 Duty of Disclosure for Insurance Contracts: A Comparative Note of the United Kingdom and Indonesia Shanty Ika Yuniarti Erasmus University Rotterdam, The Netherlands Article Info ABSTRACT Keyword: Duty of disclosure is one of the most essential aspects of an insurance contract. Its role in an insurance contract is to avoid fraud and duty of disclosure; misinterpretations. A person seeking insurance must act in good faith, insurance contracts; and good faith requires to disclose every material fact known, related misrepresentation; to the risk. It begins with the proposer for the insurance policy that is contract law; obliged to disclose all information to the insurer. However, there is a possibility either the insured or insurer done a breach of duty of insurance law disclosure. Breach of duty of disclosure includes Non-Disclosure and Misrepresentation. Breach of duty of disclosure also possible to happen in the Pre-Contractual and Post-Contractual Stage in an Article History: insurance contract due to either a deliberate, reckless, or innocent Received: 23 Jun 2020 breach. The duty of disclosure in each country might be different depends on its jurisdiction, for example, the United Kingdom as a Reviewed: 25 Sept 2020 common law country and Indonesia as a civil law country. Accepted: 26 Oct 2020 Published: 18 Dec 2020 ABSTRAK Corresponding Author: Kewajiban pengungkapan adalah salah satu aspek terpenting dari kontrak asuransi. Perannya dalam kontrak asuransi adalah untuk Email: menghindari penipuan dan salah tafsir. Seseorang yang mencari [email protected] asuransi harus bertindak dengan itikad baik, dan itikad baik mensyaratkan untuk mengungkapkan setiap fakta material yang diketahui, terkait dengan risiko. Ini dimulai dengan pengusul polis asuransi yang berkewajiban untuk mengungkapkan semua informasi kepada perusahaan asuransi. Namun, ada kemungkinan tertanggung atau penanggung melakukan pelanggaran kewajiban pengungkapan. Pelanggaran kewajiban pengungkapan termasuk Non-Disclosure dan Misrepresentation. Pelanggaran kewajiban pengungkapan juga mungkin terjadi pada Tahap Pra-Kontrak dan Pasca-Kontrak dalam kontrak asuransi baik karena pelanggaran yang disengaja, gegabah, atau tidak sengaja. Kewajiban pengungkapan di setiap negara mungkin berbeda tergantung pada yurisdiksinya, misalnya, Inggris sebagai negara hukum umum dan Indonesia sebagai negara hukum perdata. 80 Corporate and Trade Law Review Volume 01 Issue 01 January = June 2021 INTRODUCTION One of the most fundamental aspects in an insurance contract is the duty of disclosure. Duty of disclosure in an insurance contract is a mutual duty imposed to both the insured and insurer. Duty of disclosure is necessary to an insurance contract in order to avoid fraud and misrepresentation, because then the parties, especially the insurer, would know more about the risks related to the insurance contract. Duty of disclosure has been an important part of insurance law in the United Kingdom. Insurance in the United Kingdom is currently regulated in Insurance Act 2015 (“IA 2015”), which was enforced in 12 August 2016. IA 2015 amends the Marine Insurance Act 1906 (“MIA 1906”), which is considered to be the greatest change to insurance contract law in the United Kingdom over 100 years. IA 2015 is the most significant reform of the United Kingdom insurance law since MIA 1906. Duty of disclosure remains an important part of insurance law in the IA 2015. It is also to note that IA 2015 distinguishes between consumer and non-consumer insurance contract. IA 2015 only applies to non-consumer insurance contract, while consumer insurance is governed under Consumer Insurance (Disclosure and Representation) Act 2012 (“CIDRA 2012”). In Indonesia, insurance law is regulated in Law No. 40 year 2014 concerning Insurance (“Indonesian Insurance Law”). Before law on insurance in Indonesia was enforced, regulation on insurance can be found in Article 246 of Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata Indonesia) (“Indonesian Civil Code”). Article 251 of Indonesian Commercial Code (Kitab Undang-Undang Hukum Dagang Indonesia) (“Indonesian Commercial Code”) also regulates about utmost good faith. This duty of utmost good faith shall also be interpreted as duty of disclosure in the conclusion of an insurance contract. The duty to disclose is an important requirement in every insurance contract in many legal systems. However, there are no uniform principles that regulate the duty of disclosure in an insurance contract. Given the foregoing, this research aims to examines the implementation of duty of disclosure in relation to insurance contracts in the United Kingdom and Indonesia. RESULTS AND DISCUSSION 1. Duty of Disclosure in the United Kingdom and Indonesia This Chapter will discuss how the United Kingdom and Indonesia regulate duty of utmost good faith, which is manifested through duty of disclosure in insurance contracts, imposed to both the insured and insurer in pre-contractual and post-contractual stage. The purpose of the duty of disclosure is to enable the insurer to decide whether the insurer is able to accept the risk, determine the type of coverage, and decide the premium. 1.1. Doctrine of Utmost Good Faith in the United Kingdom and Indonesia An insurance contract is one of the certain contracts made by law, which is based on good faith or uberrimae fidei.1 In the United Kingdom, uberrimae fidei is clearly mentioned in Section 17 of MIA 1906, which states that a contract of marine insurance is a contract 1 Malcoma Clarke, The Law of Insurance Contracts (3rd edn, Sweet and Maxwell 1997) 390. 81 Corporate and Trade Law Review Volume 01 Issue 01 January = June 2021 based upon the utmost good faith, and, if the utmost good faith be not observed by either party, the contract may be avoided by the other party. Since MIA 1906 has been codified in common law, it has been generally used by the court that the application of MIA 1906 is not restricted only to marine insurance contracts, but insurance contracts in general. A new IA 2015 has been enforced in 12 August 2016 to amend the MIA 1906. After the amendment, Section 17 of the MIA 1906 would read that insurance contract must be based upon the utmost good faith. Good faith is discussed in Article 14 of the IA 2015. It is stated in Article 14(1) that any rule of law permitting a party to a contract of insurance to avoid the contract on the ground that the utmost good faith has not been observed by the other party, is abolished. In Indonesia, Article 1338 of Indonesian Civil Code states that an agreement must be implemented in good faith or uberrimae fidei. Good faith is the fundamental basis and faith underlying each contract that each party has an obligation to disclose or inform clearly and carefully about all the essential facts relating to the subject matter insured. This is since all the information received will be used to enforce the terms or condition or a clause in the contract. 1.2. Duty of Disclosure in the United Kingdom and Indonesia Duty of disclosure is the most important part in insurance contract and can be done in oral and written.2 A person seeking insurance must act in good faith, and good faith requires him to disclose every material fact known, related with the risk. It begins with the proposer for the insurance policy that is obliged to disclose all information to the insurer. Therefore, the insurer uses the information given to make consideration before accepting the risk.3 This duty of disclosure occurs in pre-contractual stage. Such duty is also imposed on the insurer. The insurer must also assist the insured with the terms of the contract before the conclusion of the contract. In the United Kingdom duty of disclosure can be seen in Section 18 – 20 MIA 1906. However, pursuant to Article 21(2) of the IA 2015, Sections 18-20 are omitted. Further, Section 3(4)(a) of IA 2015 replicated the duty of disclosure which was set out in Section 18(1) of MIA 1906, which states that disclosure of every material circumstance which the insured knows or ought to knows. Article 1338 of Indonesian Civil Code regulates the effects of a valid contract that fulfills the conditions regulated in Article 1320. Article 1338 stated that all valid agreements apply to the individuals who have concluded them as law. Such agreements are irrevocable other than by mutual consent, or pursuant to reasons stipulated by the law. They must be executed in good faith. It can be argued that good faith is being manifested into duty of disclosure. 1.3. Moral Hazard 2 Julie- Anne Tarr and others, Disclosure and Concealment in Consumer Insurance Contracts (1st edn, Cavendish Published Limited 2002) 66. 3 Nael G Bunni, Risk and Insurance Construction (2nd edn, Spoon and Press 2003) 212. 82 Corporate and Trade Law Review Volume 01 Issue 01 January = June 2021 Since an insurance contract is based on utmost good faith, which requires a duty to inform the insurer of any circumstance that is material to the judgment of insurer, moral hazard is needed. Generally, moral hazard exists when two parties deal with an agreement. Moral hazard in insurance contracts refers to the tendency of insurance protection to alter an individual’s motive to prevent loss.4 Both the insured and insurer possess a possibility to get in acting, which is contrary to the principles stated in the agreement. However, in many legal literatures of insurance contracts, moral hazard is rather emphasized on the insured. Moral Hazard can include anything which might indicate whether the insured is a desirable person to do business.5 Besides, there are many legal literatures stating that there are many differences on moral hazard. Moral hazard could be opened up for any avoidance of contract conducted by the insurer according to the utmost good faith in case it influences the judgment of the insurer.
Load more

Recommended publications
  • May 12, 2017 to Solicit the Parties’ Views on Any Evidentiary Hearing to Be Held
    CONTRA COSTA SUPERIOR COURT MARTINEZ, CALIFORNIA DEPARTMENT: 12 HEARING DATE: 05/12/17 1. TIME: 9:00 CASE#: MSC15-01760 CASE NAME: WALKER VS. WEST WIND DRIVE-IN HEARING ON MOTION FOR SUMMARY JUDGMENT FILED BY SYUFY ENTERPRISES, LP * TENTATIVE RULING: * Defendant Syufy Enterprises, LP files this motion for summary judgment. As captioned, the motion is facially defective because it would not dispose of the entire action and result in entry of judgment in the case. In the interest of justice, however (and bearing in mind the proximity of the trial date), the Court will treat the motion as one for summary adjudication as to the first cause of action for premises liability and the third cause of action for negligence. The parties have supported, opposed, and briefed the motion as if it were a motion for summary adjudication. The motion is denied. The present motion rests entirely on what is asserted to be a release agreement found in the original contract between the parties. The Court holds, as a matter of law, that the purported release language is not a release of claims as between these two parties, but rather an indemnification provision as to any third-party claims brought against Syufy due to Walker’s use of Syufy’s facilities. This case arises from a swap meet occurring on premises owned by defendant Syufy. Plaintiff Walker purchased a vendor ticket, an agreement entitling her to sell goods at the swap meet. The challenged counts assert liability for negligence and premises liability, arising from Walker’s injury allegedly caused by catching her foot in a pothole on the premises.
    [Show full text]
  • Handbook on Civil Discovery Practice
    MIDDLE DISTRICT DISCOVERY A HANDBOOK ON CIVIL DISCOVERY PRACTICE IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA Rev. 6/05/15 Introduction The Federal Rules of Civil Procedure, the Local Rules of the Middle District of Florida, and existing case law cover only some aspects of civil discovery practice. Many of the gaps have been filled by the actual practice of trial attorneys and, over the years, a custom and usage has developed in this district in frequently recurring discovery situations. Originally developed by a group of trial attorneys, this handbook on civil discovery practice in the United States District Court, Middle District of Florida, updated in 2001, and again in 2015, attempts to supplement the rules and decisions by capturing this custom and practice. This handbook is neither substantive law nor inflexible rule; it is an expression of generally acceptable discovery practice in the Middle District. It is revised only periodically and should not be relied on as an up-to-date reference regarding the Federal Rules of Civil Procedure, the Local Rules for the Middle District of Florida, or existing case law. Judges and attorneys practicing in the Middle District should regard the handbook as highly persuasive in addressing discovery issues. Parties who represent themselves (“pro se”) will find the handbook useful as they are also subject to the rules and court orders and may be sanctioned for non-compliance. Judges may impose specific discovery requirements in civil cases, by standing order or case-specific order. This handbook does not displace those requirements, but provides a general overview of discovery practice in the Middle District of Florida.
    [Show full text]
  • (2010) 188 Cal.App.4Th 1510
    Filed 10/6/10 CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION THREE PHIL HOLMES et al., Plaintiffs and Appellants, G041906 v. (Super. Ct. No. 30-2008-00110902) SIEGLINDE SUMMER et al., O P I N I O N Defendants and Respondents. Appeal from a judgment of the Superior Court of Orange County, David R. Chaffee, Judge. Reversed. Adorno Yoss Alvarado & Smith, Keith E. McCullough and Kevin A. Day for Plaintiffs and Appellants. Harbin & McCarron, Richard H. Coombs, Jr., and Andrew McCarron for Defendants and Respondents. Particularly in these days of rampant foreclosures and short sales, “[t]he manner in which California‟s licensed real estate brokers and salesmen conduct business is a matter of public interest and concern. [Citations.]” (Wilson v. Lewis (1980) 106 Cal.App.3d 802, 805-806.) When the real estate professionals involved in the purchase and sale of a residential property do not disclose to the buyer that the property is so greatly overencumbered that it is almost certain clear title cannot be conveyed for the agreed upon price, the transaction is doomed to fail. Not only is the buyer stung, but the marketplace is disrupted and the stream of commerce is impeded. When properties made unsellable by their debt load are listed for sale without appropriate disclosures and sales fall through, purchasers become leery of the marketplace and lenders preparing to extend credit to those purchasers waste valuable time in processing useless loans. In the presently downtrodden economy, it behooves us all for business transactions to come to fruition and for the members of the public to have confidence in real estate agents and brokers.
    [Show full text]
  • Colorado Rules of Civil & Appellate Procedure, 2017 Edition
    TABLE OF CONTENTS Colorado Rules of Civil Procedure for Courts of Record in Colorado Chapter 1. Scope of Rules, One Form of Action, Commencement of Action, Service of Process, Pleadings, Motions and Orders . .5 Rule 1. Scope of Rules . .5 Rule 2. One Form of Action . .8 Rule 3. Commencement of Action . .8 Rule 4. Process . .10 Rule 5. Service and Filing of Pleadings and Other Papers . .30 Rule 6. Time . .34 Chapter 2. Pleadings and Motions . .41 Rule 7. Pleadings Allowed: Form of Motions . .41 Rule 8. General Rules of Pleading . .44 Rule 9. Pleading Special Matters . .61 Rule 10. Form and Quality of Pleadings, Motions and Other Documents . .68 Rule 11. Signing of Pleadings . .75 Rule 12. Defenses and Objections—When and How Presented—by Pleading or Motion—Motion for Judgment on Pleadings . .79 Rule 13. Counterclaim and Cross Claim . .99 Rule 14. Third-Party Practice . .105 Rule 15. Amended and Supplemental Pleadings . .109 Rule 16. Case Management and Trial Management . .128 Rule 16.1. Simplified Procedure for Civil Actions . .141 Rule 16.2. Court Facilitated Management of Domestic Relations Cases and General Provisions Governing Duty of Disclosure . .145 Chapter 3. Parties . .153 Rule 17. Parties Plaintiff and Defendant; Capacity . .153 Rule 18. Joinder of Claims and Remedies . .161 Rule 19. Joinder of Persons Needed for Just Adjudication . .163 Rule 20. Permissive Joinder of Parties . .169 Rule 21. Misjoinder and Nonjoinder of Parties . .174 Rule 22. Interpleader . .174 Rule 23. Class Actions . .175 Rule 23.1. Derivative Actions by Shareholders . .183 Rule 23.2. Actions Relating to Unincorporated Associations .
    [Show full text]
  • Securities Litigation
    March 27, 2017 Securities Litigation U.S. Supreme Court Grants Certiorari to Decide Issue That Might Have Significant Impact on Registrants’ Exposure for Non-Disclosure of “Known Trends or Uncertainties” in SEC Filings SUMMARY Earlier today, the U.S. Supreme Court granted certiorari in Leidos, Inc. v. Indiana Public Retirement System, No. 16-581. This appeal, which likely will not be decided until the first half of 2018, at the earliest, presents the question of whether non-disclosure of “known trends or uncertainties” under Item 303 of Regulation S-K may give rise to private liability for securities fraud under Section 10(b) of the Securities Exchange Act of 1934. The U.S. Supreme Court will address a split between the Second Circuit, which has held that, under some circumstances, non-disclosure under Item 303 of Regulation S-K could give rise to private securities fraud liability, and the Third and Ninth Circuits, which held that such non-disclosure does not create a private securities fraud claim. Although the Supreme Court’s decision will not affect the obligation of registrants to comply with Item 303, it may have a significant impact on their potential exposure to securities fraud claims. BACKGROUND The Supreme Court has long held that “[s]ilence, absent a duty to disclose, is not misleading under Rule 10b-5.” Basic Inc. v. Levinson, 485 U.S. 224, 239 n.17 (1988). To establish a securities fraud claim based on a registrant’s alleged omission of material fact, a shareholder plaintiff must therefore show, among other things, that the registrant had a duty to disclose the omitted information.
    [Show full text]
  • ERISA Litigation Handbook Practice Series
    Practice Series ERISA Litigation Handbook Craig C. Martin Michael A. Doornweerd Amanda S. Amert Douglas A. Sondgeroth © Copyright 2012 Jenner & Block LLP. Jenner & Block is an Illinois Limited Liability Partnership including professional corporations. Offices 353 N. Clark Street 919 Third Avenue Chicago, Illinois 60654-3456 New York, New York 10022-3908 Firm: 312 222-9350 Firm: 212 891-1600 Fax: 312 527-0484 Fax: 212 891-1699 1099 New York Avenue, NW 633 West 5th Street Suite 900 Suite 3600 Washington, DC 20001-4412 Los Angeles, California 90071-2054 Firm: 202 639-6000 Firm: 213 239-5100 Fax: 202 639-6066 Fax: 213 239-5199 Website www.jenner.com Author Information Craig C. Martin Michael A. Doornweerd Jenner & Block Jenner & Block Tel: 312 923-2776 Tel: 312 923-2631 E-Mail: [email protected] E-Mail: [email protected] Amanda S. Amert Douglas A. Sondgeroth Jenner & Block Jenner & Block Tel: 312 923-2605 Tel: 312 840-7605 E-Mail: [email protected] E-Mail: [email protected] © 2012 Jenner & Block LLP. This publication is intended only to provide information on legal matters and is not intended to provide advice. Readers should seek specific legal advice before taking any action with respect to matters mentioned or addressed in this publication. This is advertising material and Craig C. Martin, Michael A. Doornweerd, Amanda S. Amert, and Douglas A. Sondgeroth are responsible for its content. ATTORNEYADVERTISING INTRODUCTION This is the fifth edition of Jenner & Block’s ERISA Litigation Handbook. Like previous editions of the Handbook, this expanded edition provides a basic primer on the issues presented and procedures followed in litigation under the Employee Retirement Income Security Act of 1974, 29 U.S.C.
    [Show full text]
  • Case 2:16-Cv-13456-PDB-RSW ECF No. 92 Filed 07/03/18 Pageid
    Case 2:16-cv-13456-PDB-RSW ECF No. 92 filed 07/03/18 PageID.<pageID> Page 1 of 20 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION WEBASTO THERMO & COMFORT NORTH AMERICA, INC. and WEBASTO-EDSCHA CABRIO USA, INC., Plaintiffs, Case No. 16-cv-13456 Paul D. Borman v. United States District Judge BESTOP, INC., Defendant. _______________________________/ OPINION AND ORDER GRANTING PLAINTIFFS’ PARTIAL MOTION TO DISMISS BESTOP’S FIRST AMENDED COUNTERCLAIM AND TO STRIKE BESTOP’S SEVENTH AFFIRMATIVE DEFENSE (ECF NO. 46) This action involves Plaintiffs Webasto Thermo & Comfort North America, Inc. and Webasto-Edscha Cabrio USA, Inc.’s (collectively “Webasto”) claim that Defendant Bestop, Inc. (“BesTop”) infringes Webasto’s U.S. Patent No. 9,346,342 (“the ‘342 Patent”), entitled “Vehicle Roof and Roof Opening Mechanism.” BesTop asserts that the claims of the ‘342 Patent were disclosed in prior art and are therefore unpatentable. BesTop has filed its First Amended Counterclaim, adding a claim of inequitable conduct and an affirmative defense of unclean hands based on that same alleged inequitable conduct. Webasto now moves to dismiss the inequitable conduct 1 Case 2:16-cv-13456-PDB-RSW ECF No. 92 filed 07/03/18 PageID.<pageID> Page 2 of 20 claim under Fed. R. Civ. P. 12(b)(6) and Fed. R. Civ. P. 9(b), and to strike the unclean hands affirmative defense pursuant to Fed. R. Civ. P. 12(f). The Court concludes that a hearing is not necessary to resolve the issues raised in Webasto’s motion and will determine the matter on the parties’ written submissions.
    [Show full text]
  • DISCLOSURE DUTIES ARISING UNDER SECTION 10(B): WHEN to CORRECT OR UPDATE by Joni S
    Practising Law Institute: Securities Litigation & Enforcement Institute 2011 DISCLOSURE DUTIES ARISING UNDER SECTION 10(B): WHEN TO CORRECT OR UPDATE by Joni S. Jacobsen, Jennifer C. Ryan and Laura A. Brake Katten Muchin Rosenman LLP. ©2011 Joni S. Jacobsen All rights reserved. Perhaps to the dismay of litigious shareholder representatives and their counsel, companies and other potential defendants will not be found liable for federal securities fraud under Section 10(b)1 and Rule 10b-52 simply because they do not disclose every piece of material information a shareholder might like to know.3 Nor are they required to be “clairvoyant” so that they can guarantee that the information they convey, or the reasons they choose to not convey certain information, will continue to be accurate.4 Rather, with respect to a claim of nondisclosure under Section 10(b), the premise underlying liability is that a company had a duty to disclose the information that was allegedly fraudulently withheld, and that duty either existed at the time of the omission or subsequently arose as a result of later events.5 Although the Securities and Exchange Commission had faced the issue earlier,6 a judicial determination of when a duty to disclose arises under Section 10(b) was formalized by the Supreme Court in 1980 in Chiarella v. United States.7 Since then, both district and appellate courts, as well as the Supreme Court itself, have expounded on Chiarella’s original reasoning. The result is a framework that provides would-be defendants with some insight to guide their disclosure decisions. Among the notable developments is the arguable establishment of two related concepts that go beyond a basic duty to disclose –a duty to correct8 and a duty to update9 –each of which has spawned its own body of case law.
    [Show full text]
  • 3585340 14 Conflicts Between Lawyers Mcguirewoods LLP and Their Clients: Part II T
    Conflicts Between Lawyers McGuireWoods LLP and Their Clients: Part II T. Spahn (8/6/15) Hypotheticals and Analyses ABA Master CONFLICTS BETWEEN LAWYERS AND THEIR CLIENTS PART II Hypotheticals and Analyses Thomas E. Spahn McGuireWoods LLP These analyses primarily rely on the ABA Model Rules, which represent a voluntary organization's suggested guidelines. Every state has adopted its own unique set of mandatory ethics rules, and you should check those when seeking ethics guidance. For ease of use, these analyses and citations use the generic term "legal ethics opinion" rather than the formal categories of the ABA's and state authorities' opinions -- including advisory, formal and informal. ______________________ © 2015 McGuireWoods LLP. McGuireWoods LLP grants you the right to download and/or reproduce this work for personal, educational use within your organization only, provided that you give proper attribution and do not alter the work. You are not permitted to re-publish or re-distribute the work to third parties without permission. Please email Thomas E. Spahn ([email protected]) with any questions or requests. 3585340_14 Conflicts Between Lawyers McGuireWoods LLP and Their Clients: Part II T. Spahn (8/6/15) Hypotheticals and Analyses ABA Master TABLE OF CONTENTS Hypo No. Description Page Practice Limitations: Partnership and Employment Agreements 1 Law Firm Non-Compete Arrangements ..................................................... 1 2 Other Law Firm Restrictions ....................................................................... 3 3 Restrictions in Connection with a Law Firm's Retirement Program ....... 17 4 Law Firms' Remedies Against Withdrawing Lawyers .............................. 22 5 In-House Lawyers' Practice Limitations .................................................... 48 Practice Limitations: Settlements 6 Litigation Settlements: General Rule ........................................................ 52 7 Litigation Settlements: Other Possible Provisions .................................
    [Show full text]
  • The Fiduciary Duty of Disclosure After Dabit, 2 J
    Journal of Business & Technology Law Volume 2 | Issue 2 Article 9 The iducF iary Duty of Disclosure after Dabit Jack B. Jacobs Follow this and additional works at: http://digitalcommons.law.umaryland.edu/jbtl Part of the Business Organizations Law Commons Recommended Citation Jack B. Jacobs, The Fiduciary Duty of Disclosure after Dabit, 2 J. Bus. & Tech. L. 391 (2007) Available at: http://digitalcommons.law.umaryland.edu/jbtl/vol2/iss2/9 This Speech is brought to you for free and open access by the Academic Journals at DigitalCommons@UM Carey Law. It has been accepted for inclusion in Journal of Business & Technology Law by an authorized editor of DigitalCommons@UM Carey Law. For more information, please contact [email protected]. JACK B. JACOBS* The Fiduciary Duty of Disclosure after Dabit MY TOPIC IS THE IMPACT OF THE RECENT UNITED STATES Supreme Court decision in Merrill Lynch v. Dabit l upon Delaware's common law fiduciary duty of disclo- sure.2 Dabit reminds us that Congress and the SEC are not the only sources for federalizing state corporate law and roles of governance. The Supreme Court must be counted as well. Dabit held that the Securities Litigation Uniform Standards Act of 1998' (SLUSA) preempted a class action under Oklahoma state law, claiming that Merrill Lynch had made misleading, manipulative disclosures to its brokers and to the market.4 Those misdisclosures allegedly caused Merrill Lynch's former brokers to hold, rather than sell, certain shares in their customers' accounts, thereby causing those accounts to lose significant value.' Although Dabit did not involve a claim for breach of the Delaware fiduciary duty of disclosure, the specific question that I raise is whether Dabit will be interpreted to require federal preemption of any aspect of the Delaware disclosure duty, and if so, which aspects.
    [Show full text]
  • March 5, 2013 CV 2012 5842 O Neal V Mumford
    STATE OF IDAHO ) County of KOOTENAI )ss FILED______________________ AT___________ O'Clock _____M CLERK OF DISTRICT COURT ___________________________ Deputy IN THE DISTRICT COURT OF THE FIRST JUDICIAL DISTRICT OF THE STATE OF IDAHO IN AND FOR THE COUNTY OF KOOTENAI JOSEPH P. O'NEAL, ) Case No. CV 2012 5842 ) Plaintiff, ) MEMORANDUM DECISION AND vs. ) ORDER ON DEFENDANTS’ MOTION ) FOR SUMMARY JUDGMENT AND ALBERT MUMFORD and MARCIA BELLES ) DEFENDANTS’ MOTION TO STRIKE MUMFORD, husband and wife, ) ) Defendants. ) ) ) I. PROCEDURAL HISTORY AND FACTUAL BACKGROUND. This matter is before the Court on defendants’ Albert and Marcia Mumford (Mumfords) motion for summary judgment. On August 7, 2012, plaintiff Joseph O’Neal (O’Neal) filed his Complaint against Albert Mumford and Marcia Belles Mumford, husband and wife (Complaint, p. 1), (hereafter the “Mumfords”) requesting rescission of a land sale contract, or in the alternative, damages, as well as pre-judgment interest, under the theory of fraudulent non-disclosure. The basis of O’Neal’s complaint is the Mumfords sold him the property at issue, knowing the property was classified as non-buildable and the land itself was sliding, without disclosing this information to O’Neal. Complaint, p. 6. Mumfords filed their Answer on October 23, 2012, denying the pertinent allegations set forth in the Complaint. Answer, pp. 1-3. Mumfords raise various affirmative defenses. Id., p. 3. MEMORANDUM DECISION AND ORDER ON DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DEFENDANTS’ MOTION TO STRIKE Page 1 On January 15, 2013, Mumfords filed their Motion for Summary Judgment, Memorandum in Support of Summary Judgment, Affidavit of Marcia Mumford and Affidavit of Michael G.
    [Show full text]
  • United States District Court of Connecticut Local Rules
    UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT LOCAL RULES OF CIVIL PROCEDURE LOCAL RULES FOR MAGISTRATE JUDGES LOCAL RULES OF CRIMINAL PROCEDURE Amended December 1, 2009* *If a Rule was amended after December 2009, the date of amendment is located on the page of the Rule. TABLE OF CONTENTS JUDGES OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF CONNECTICUT ............................................................................................................................ 1 LOCAL RULES OF CIVIL PROCEDURE ..................................................................................... 2 RULE 1 ...................................................................................................................................... 2 SCOPE OF RULES ................................................................................................................... 2 (a) Title and Citation ......................................................................................................... 2 (b) Effective Date .............................................................................................................. 2 (c) Definitions ................................................................................................................... 2 RULE 2 ...................................................................................................................................... 3 (RESERVED) ...........................................................................................................................
    [Show full text]