Jerry and Anna Duncan owned a 2000 Ford Expedition manufactured by the Ford Motor Company. The vehicle was purchased from a local dealer, Foster Ford. The Duncans parked the vehicle in the garage at their home. The Expedition caught on fire, which spread to the garage and the rest of the home. The home was determined to be a total loss.

The Duncan's are pursuing a claim against the Ford Motor Company and the Ford Dealer claiming that the Expedition was defective and that neither had warned them about the defect that caused the fire. They claim that a faulty cruise control was what caused the fire. They had knowledge of a recall notice but had done nothing to remedy the defect.

The Ford Motor Company admitted that the vehicle was subject to a recall - but that recall was related to a speed control deactivation switch which did not cause the fire. They argued that the fire occurred for some other reason.

The Duncan's estimate that the loss of their home and their belongings totaled over $650,000. They are also alleging that neither the Ford Motor Company nor the Dealer adequately warned or communicated to them or other consumers that there was a defect in this product that could cause considerable harm to life and/or property.

Questions:

1. What is the basis for legal liability?
2. What is the duty owed and who owes the duty?
3. Are there differences in the duty owed?
4. What factors and/or defenses exist for the plaintiffs for the claims made by the Duncans?
5. What is your assessment of fault? (use % if appropriate)
6. What type of damages do you think are owed to the Duncans?
7. Is this loss covered by the CGL? If so, what coverage part and why?