Transportation Law Compendium
Presented by the USLAW Transportation Practice Group 2008
Negligent Entrustment, Hiring, Retention and Supervision in Trucking Cases: Various State Survey
INTRODUCTION
This compendium is a survey of state law on various issues associated with the derivative negligence claims of negligent entrustment, hiring, retention and supervision in truck accident cases. It examines the elements of proof of each theory by which an employer might be held to have derivative or dependent liability for the conduct of an employee or independent operator, defenses that can be asserted to such claims and whether such theories can support a claim of punitive damages.
The compendium addresses the various ways the states handle these issues. We believe it will be an important resource for members of the transportation industry.
Compilation by USLAW Attorneys: The survey was compiled from information submitted by USLAW transportation attorneys from across the country. All of these attorneys and their firms handle transportation cases on a regular basis and understand the legal issues that are importation to the transportation industry.
Note: This compendium is designed to be a general reference guide and not an exhaustive analysis of each state’s law. Each state has various nuances and exceptions that may be applicable to the particular case at hand. This compendium is not intended to be a substitute for contacting your USLAW firm or an attorney should any questions arise.
Kevin L. Fritz Lashly & Baer, P.C. 714 Locust Street St. Louis, Missouri 63101 Tel: (314) 436-8309 Fax: (314) 621-6844 Email: [email protected]
Editor
Alabama
Thomas L. Oliver Carr Allison 100 Vestavia Parkway Birmingham, Alabama 35216 Tel: (205) 822-2006 Fax: (205) 822-2057 Email: [email protected]
A. Elements of Proof for the Derivative Negligence Claims of Respondeat Superior, Negligent Entrustment, Negligent Hiring or Retention, and Negligent Training or Supervision
In Alabama, there exist four distinct theories by which an employer might be held to have derivative or dependent liability for the conduct of an employee. The four theories of liability are respondeat superior, negligent entrustment, negligent hiring or retention, and negligent training or supervision. These theories are each based on derivative or dependent liability, which simply means that one element of imposing liability on the employer is a finding of culpability by the employee in causing an injury to a third party. In other words, if the employee is exonerated, the employer cannot be liable.
1. Respondeat Superior (Let the master answer)
a. What are the elements necessary to establish liability under a theory of Respondeat Superior?
To establish a claim under a theory of respondeat superior liability, the plaintiff must demonstrate that (1) the employer reserved a right of control over the employee and (2) the employer maintained a right of selection over the employee. Ware v. Timmons, 954 So. 2d 545, 553-555 (Ala. 2006). The plaintiff must additionally show, by substantial evidence, that the employee's act was within the scope of the employee's employment. Jessup v. Shaddix, 154 So. 2d 39, 41 (1963) (citing Red's Elec. Co. v. Beasley, 129 So. 2d 676 (1961)). An act is within an employee's scope of employment if the act is done as part of the duties the employee was hired to perform or if the act confers a benefit on his employer. See Jessup, 154 So. 2d at 41. This requirement has been construed liberally in Alabama.
Under a respondeat superior theory, an employer is liable for the acts of an independent contractor if the “alleged employer has reserved the right of control over the means by which the work is done.” Sharpe v. AMF Bowling Ctrs., Inc., 756 So. 2d 874, 876 (Ala. 2000) (citing Lankford v. Gulf Lumber Co., 597 So. 2d 1340, 1343 (Ala. 1992)). Please note that the test is not the actual exercise of the control but the reserved right of control by the employer.
b. Examples
In Solmica of Gulf Coast, Inc. v. Braggs, an employee, driving under the influence and after hours, created a jury question whether he was in the scope of his employment when he stated that he was “probably headed to the office.” 232 So. 2d 698 (Ala. 1970). “To exclude the conduct from the master’s liability, the agent must be impelled by motives that are wholly personal, or to gratify his own feelings or resentment, and no action was made in promotion of the employment.” Id.
The Alabama Supreme Court also held that "the mere fact that [the employee] was acting against company policy is not … conclusive as to the question of [the employee's] status at the time of the accident." Williams v. Hughes Moving & Storage Co., 578 So. 2d 1281, 1283 (Ala. 1991). Williams involved an employee who was involved in a motor vehicle accident while using his employer's truck. Id. The employer's only defense was that the employee had violated the company's policy regarding use of the truck. Id. This Court held that the employee's violation of that policy alone was not conclusive proof that the employee was acting outside the scope of his employment. Id.
c. Placard Liability
With regard to placard liability in Alabama, there is a presumption that the equipment is under the control and lease of the carrier whose "placards have not been removed from the equipment." Phillips v. J.H. Transport, Inc., 565 So. 2d 66, 71 (Ala. 1990). Alabama places the burden on the carrier to remove placards at the termination of the lease in order to remove the presumption of control over the equipment. See Phillips, 565 So. 2d at 70.
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
In Pryor v. Brown & Root USA, 674 So. 2d 45, 51 (Ala. 1995), the Supreme Court of Alabama set out the burden a plaintiff must satisfy in order to succeed on a claim for negligent entrustment. The elements for a cause of action for negligent entrustment are: “(1) an entrustment; (2) to an incompetent; (3) with knowledge that he [or she] is incompetent; (4) proximate cause; and (5) damages.” Id. (quoting Mason v. New, 475 So. 2d 854, 856 (Ala. 1985)). Finally, the court paraphrased the most important element of the claim by stating, “the doctrine of negligent entrustment is founded on the primary negligence of the entrustor in supplying a motor vehicle to an incompetent driver, with the manifestations of the incompetence of the driver as a basic requirement of the negligent entrustment action.” Id.
b. Examples
The Alabama Supreme Court affirmed a judgment against a non-commercial truck owner for negligent entrustment after the Plaintiff was injured in a motor vehicle accident involving the brother in law of the truck owner. Edwards v. Valentine, 926 So. 2d 315, 319-331 (Ala. 2005). The owner knew that the brother in law was unlicensed, had been convicted of a prior DUI charge, had a current drinking problem, and was specifically forbidden from using the owner’s truck. Id. at 321. However, the brother in law had driven the truck in the past and the owner left the truck available to his sister, wife of the incompetent driver, for emergencies. Id. at 320. The Alabama Supreme Court found that this evidence supported the verdict against the owner of the truck for negligent entrustment. Id. at 331.
Additionally, another plaintiff, Ms. Pryor, sued Brown & Root Company as a result of a motor vehicle accident alleging that Brown & Root negligently entrusted one of its vehicles to the driver that struck her. Pryor, 674 So. 2d at 46. After examining the evidence, the court concluded that the employee’s “prior driving record — two speeding tickets and a suspended prosecution of a DUI charge over a 10 year period — is not sufficient to support a claim of negligent entrustment against Brown & Root.” Id. at 52. The court stated that, “Pryor failed to present substantial evidence that [the employee] was an incompetent driver or that Brown & Root had any knowledge that would indicate [the employee] was incompetent.” Id.
3. Negligent Hiring and Retention
a. What are the elements necessary to establish liability under a theory of negligent hiring or retention?
Claims for negligent hiring or retention are often considered in conjunction with claims of negligent entrustment and negligent training or supervision, as the claims share the common elements of incompetency on the part of the employee and knowledge, either actual or presumed, of the employee’s incompetence on the part of the employer. Typically, all of these allegations will be alleged simultaneously in a Plaintiff’s complaint. As such, the Alabama courts will usually address these allegations collectively.
While interpreting Alabama law, the United States District Court for the Southern District of Alabama stated, “the Alabama Supreme Court explained the elements for employer liability under the theory of negligent hiring, training or supervision” as follows: In the master and servant relationship, the master is held responsible for his servant’s incompetency when notice or knowledge, either actual or presumed, of such unfitness has been brought to him. Liability depends upon its being established by affirmative proof that such incompetency was actually known by the master or that, had he exercised due and proper diligence, he would have learned that which would charge him in the law with such knowledge.
Coleman v. Flagstar Enters., Inc., 1999 U.S. Dist. LEXIS 8500 (S.D. Ala. May 19, 1999) (emphasis added) (quoting Big B. v. Cottingham, 634 So. 2d 999, 1003 (Ala. 1993); see also Mardis v. Robbins Tire & Rubber Co., 669 So. 2d 885, 889 (Ala. 1995)). The element of knowledge required in claims of negligent hiring and retention mirrors the element of knowledge required in claims of negligent entrustment, that is, the employer’s knowledge of the employee’s incompetence. For negligent hiring or retention claims, the employer must have known or should have known of the incompetence on the employee’s date of hire or retention.
Notably, evidence of specific acts of alleged incompetency is not admissible to prove that the employee was negligent in doing the act complained of, but is admissible to prove that the employer had notice of the employee's incompetency. Big B. v. Cottingham, 634 So. 2d 999, 1003 (Ala. 1993).
b. Examples
A failure to present evidence of the employer’s knowledge of the employee’s incompetence justified an order of summary judgment for the negligent hiring and supervision claims. Stephens v. City of Butler, 2007 U.S. Dist. LEXIS 45651 at *49-50 (S.D. Ala. June 23, 2007).
4. Negligent Training and Supervision
a. What are the elements necessary to establish liability under a theory of negligent training or supervision?
Claims for negligent training or supervision again share the common elements of incompetency on the part of the employee and knowledge of the employee’s incompetence on the part of the employer. The elements of negligent supervision were addressed in Lane v. Central Bank of Alabama, N.A., 425 So. 2d 1098, 1100 (Ala. 1983), as follows:
In the master and servant relationship, the master is held responsible for his servant's incompetency when notice or knowledge, either actual or presumed, of such unfitness has been brought to him. Liability depends upon its being established by affirmative proof that such incompetency was actually known by the master or that, had he exercised due and proper diligence, he would have learned that which would charge him in the law with such knowledge. It is incumbent on the party charging negligence to show it by proper evidence.
The party alleging negligent supervision or training must additionally prove the underlying charges against the employee. Stevenson v. Precision Standard, Inc., 762 So. 2d 820 (Ala. 1999).
b. Examples
An employee of the defendant allegedly used improper procedures during the repossession of a vehicle from the Plaintiff. Zielke v. AmSouth Bank, N.A., 703 So. 2d 354, 359 (Ala. Civ. App. 1996). The Plaintiff brought suit alleging, among other counts, negligent training. Id. After notice of the use of the improper procedure was provided to the defendant employer, no evidence was presented to demonstrate that the procedure was repeated. Id. Therefore, the Court held that the plaintiff’s negligent training claim was not proper. Id.
A. Defenses
1. Admission of Agency
The Alabama Supreme Court has not addressed the issue concerning whether the admission of agency by an employer will subsume the other derivative claims of liability against the employer, namely negligent entrustment, hiring, supervision, training, and retention. However, the United States District Court for the Middle District has analyzed Alabama case law and determined that Alabama would follow the minority view and allow the plaintiff to maintain derivative claims against an employer. Poplin v. Bestway Express, 286 F. Supp. 2d 1316, 1318-1320 (D. Ala. 2003).
The Federal Court, after analyzing both the majority and minority approach, found that “available case law indicates that the Alabama Supreme Court would hold the torts of negligent entrustment, hiring, training, supervision, and retention as distinct from a negligence claim based on the theory of respondeat superior when the defendant admits liability.” Id. at 1319 (citing Bruck v. Jim Walter Corp., 470 So. 2d 1141, 1142 (Ala. 1985)). The federal court stated that “the tort of negligent entrustment does not arise out of the relationship between the parties but rather is an independent tort resting upon the negligence of the entrustor in entrusting the vehicle to an incompetent driver." Id. The Federal Court further offered to bifurcate the trial on the separate issues if the evidence in support of the negligent entrustment claim is prejudicial to the negligence claim. Id.
2. Traditional Tort Defenses
Depending on the facts of a particular case, given the derivative nature of these theories, traditional tort defenses may also apply including contributory negligence, statute of limitations, statute of repose, assumption of the risk, failure to mitigate damages, superseding and intervening causes, sudden emergency, laches, waiver, and estoppel.
Notably, in Alabama, contributory negligence is an affirmative and complete defense to a negligence claim. See Knight v. Alabama Power Co., 580 So. 2d 576 (Ala. 1991); Ridgeway v. CSX Transp., Inc., 723 So. 2d 600, 606 (Ala. 1998). Under this theory if the jury finds that a plaintiff was even 1% negligent, they should not award any damages. However, many juries in Alabama find this rule of law to be harsh. As such, the typical jury will “discount” the award to the Plaintiff in light of the corresponding negligence. This usually is signified by the jury reducing the award to correspond to the damages owed in light of the Plaintiff’s own negligence without assigning any actual negligence to Plaintiff’s own actions.
B. Punitive Damages
1. Is evidence supporting a derivative negligence claim permissible to prove an assertion of punitive damages?
In Alabama, punitive damages are not available under negligence theories such as negligent hiring, training, and retention. See CP & B Enterprises v. Mellert, 762 So. 2d 356, 362 (Ala. 2000). In order to justify an award of punitive damages, plaintiffs must satisfy the elements required for the corresponding claims of negligence, plus the additional elements required to prove wantonness for those same claims. To substantiate an award of punitive damages, the Alabama Code requires that the employer either: (i) knew or should have known of the unfitness of the employee and employed him or continued to employ him, without proper instruction, with a disregard of the rights or safety of others; or (ii) authorized the wrongful conduct of the employee; or (iii) ratified the wrongful conduct; except where the plaintiff knowingly participated with the defendant to commit fraud or wrongful conduct with full knowledge of the import of his act. See Code of Ala. § 6-11-27
The Alabama Supreme Court considered the tort of wanton training and supervision in Big B. v. Cottingham, referenced above. Big B., 634 So. 2d at 1004. The court noted “[w]antonness is defined as. . . conduct which is carried on with a reckless or conscious disregard of the rights or safety of others.” Id. (emphasis added). That interpretation is supported by the following definition of wantonness:
Wantonness is the conscious doing of some act or omission of some duty under knowledge of existing conditions and conscious that from the doing of such act or omission of such duty an injury will likely or probably result. Before a party can be said to be guilty of wanton conduct it must be shown that with reckless indifference to the consequences he either consciously and intentionally did some wrongful act or consciously omitted some known duty which produced the injury.
Alabama Pattern Jury Instructions: Civil (APJI) 29.00 (2d ed. 1993). Moreover, the Plaintiff must submit “substantial evidence” of wantonness to have the issue submitted to a jury. See Scott v. Villages, 723 So. 2d 642, 543 (Ala. 1998).
2. Examples
Alabama courts have found the following factual scenarios present substantial evidence to support the presentation of a wanton claim to the jury:
A claim for wantonness was presented to the jury when the Defendant was exceeding the speed limit, smelled of alcohol, and did not have his lights on when he rear-ended the plaintiffs. Prince v. Kennemer, 292 Ala. 168, 170 (Ala. 1974).
Another driver, after hearing a gunshot, ducked below the dashboard, pressed on the accelerator, and knowingly entered an intersection against a red light presented an issue of fact as to whether the driver had acted with reckless disregard for the rights and safety of others, thus precluding summary judgment of the wantonness claim. Berry v. Fife, 590 So. 2d 884 (Ala. 1991).
A fact question on a wantonness count was additionally found when the driver was driving much faster than the posted speed limit, not paying attention to the road, and failed to slow his speed despite the presence of construction signs, with prior knowledge that a restaurant into which patrons would likely be turning was on the other side of the hill he was cresting. Hicks v. Dunn, 819 So. 2d 22, 25 (Ala. 2001).
Alaska
Kenneth M. Gutsch Richmond & Quinn 360 K Street Anchorage, Alaska 99501 Tel: (907) 276-5727 Fax: (907) 276-2953 Email: [email protected]
A. Elements of Proof for the Derivative Negligence Claims of Negligent Entrustment, Hiring/Retention and Supervision
Alaska recognizes separate causes of action based on respondeat superior, negligent entrustment, negligent hiring and negligent supervision.
1. Respondeat Superior.
a. What are the elements necessary to establish liability under a theory of Respondeat Superior?
Respondeat superior imposes vicarious liability for the employee's negligent and intentional torts if they were committed within the scope of employment.1 Alaska follows the factors set out in the Restatement (Second) of Agency, Sections 228 and 229, as relevant considerations in the fact-specific inquiry of determining whether an employee acts within the scope and course of his employment. Id. at pp. 358, 359.
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
Alaska recognizes the common law tort of negligent entrustment and follows the definition in the Restatement (Second) of Torts § 390 (1965), which states: “One who supplies directly or through a third person a chattel for the use of another whom the supplier knows or has reason to know, to be likely because of his youth, inexperience, or otherwise, to use it in a manner involving unreasonable risk of physical harm to himself and others whom the supplier should expect to share in or be endangered by its use, is subject to liability for physical harm resulting to them.”2 Negligent entrustment is an independent cause of action against the vehicle owner and is not dependent on theories of agency, joint venture, or other forms of vicarious liability.3 The entrustee’s negligent act is a necessary element of any negligent entrustment claim against the entrustor.4
However, AS 09.17.080 requires that the fault of all the parties be apportioned. Based on AS 09.17.080, the jury would be instructed to apportion the separate fault and relative financial
1 See, e.g., Taranto v. North Slope Borough, 909 P.2d 354, 358 (Alaska 1996).
2 Nelson v. Progressive Cas. Ins. Co., 162 P.3d 1228, 1232 (Alaska 2007).
3 Ardinger v. Hummel, 982 P.2d 727, 733 (Alaska 1999).
4 Nelson v. Progressive Cas. Ins. Co., 162 P.3d 1228, 1234 (Alaska 2007). See also, Neary v. McDonald, 956 P.2d 1205, 1208 (Alaska 1998) with regard to the entrustment of a vehicle, “negligent entrustment liability cannot be established unless the defendant had sufficient control of the vehicle, and negligently supplied it to an incompetent third party.” responsibility of both the entrustor and entrustee; and the employer and employee.5 As a result of the apportionment of separate fault to each defendant, the doctrine of respondeat superior is usually asserted independently to make employers vicariously liable for their employee’s acts
3. Negligent Hiring
a. What are the elements necessary to establish liability under a theory of negligent hiring?
Alaska recognizes negligent hiring, supervision and retention as independent bases for negligence liability. The three theories entail an employer’s direct liability for the failure to exercise reasonable care in hiring, supervising, or retaining an employee.6 An employer also has a duty to others to act reasonably in hiring a competent independent contractor.7 Plaintiff must show that the defendant employer failed to exercise reasonable care in hiring, and/or retaining or supervising the employee and that the failure to do so was a substantial factor in causing harm to the plaintiff.8 For actions arising after 1997, Kodiak Island recognized that fault for negligent hiring could be apportioned between the employer and employee to reduce the employer’s share of the fault. Id. at 1012-1015. While our supreme court has not directly addressed whether AS 09.17.080’s apportionment scheme supersedes the common law doctrine of respondeat superior, the court has assumed in dicta that respondeat superior continues to apply even where both the employer and employee are named parties and have their fault apportioned.9
4. Negligent Supervision
a. What are the elements necessary to establish liability under a theory of negligent supervision?
Alaska recognizes the actionable failure to exercise due care in supervising persons under the employer’s direction and control.10 As noted above, under AS 09.17.080, an employer will only be liable for its own percentage of fault based on negligent hire, entrustment, or supervision.11 However, respondeat superior would offer a separate basis for liability against the employer.
5 See e.g. Nelson at 1233. “[t]he nature and extent of negligence of the entrustor and entrustee are separate and distinct. The percentages of fault may be different in amount and should be determined separately.” Pederson v. Barnes, 139 P.3d 552 (Alaska 2006) ( allocation with fault applies as between principal and agent).
6 Powell v. Tanner, 59 P.3d 246, 252 (Alaska 2002).
7 Sievers v. McClure, 746 P.2d 885, 991 (Alaska 1987).
8 Kodiak Island Borough v. Roe, 63 P.3d 1009, 1011 (Alaska 2003)(negligent hire of counselor with sexual abuse history who sexually abused developmentally disabled resident of Borough facility.)
9 See Pagenkopf v. Chatham Elec., Inc., 165 P.3d 634 (Alaska 2007).
10 Powell, at 252.
11 Kodiak Island Borough v. Roe, 63 P.3d 1009 (Alaska 2003) (dicta).
B. Defenses
1. Admission of Agency
Our court allows a plaintiff to assert both direct negligence and vicarious liability theories even if the employer were to admit vicarious liability based on respondeat superior.12
2. Traditional Tort Defenses
Alaska is a pure comparative fault state and allows the apportionment of fault to all parties under AS 09.17.080 to reduce a defendant’s share of the fault for direct negligence. Alaska recognizes other traditional tort defenses such as the failure to mitigate damages, and superseding and intervening cause.13
C. Punitive Damages
1. Is evidence supporting a derivative negligence claim permissible to prove an assertion of punitive damages?
Yes. However, Alaska imposes significant restrictions on the availability of punitive damages. Generally speaking, punitive damages may only be awarded upon a finding, by clear and convincing evidence, of outrageous acts done with malice, or reckless indifference to the interest of another person. AS 09.17.020(b)(2). Further, 50% of any punitive damages recovery goes to the State. AS 09.17.020(j).
However, with regard to claims for punitive damages based on vicarious liability for an employee’s misconduct, Alaska law is even more protective of the employer. AS 09.17.020(k) restricts an employer’s vicarious liability for punitive damages (1) to wrongful acts committed by a manager; (2) to wrongful acts of an employee which are authorized or ratified by the manager; or (3) to instances where the employee was unfit to perform the job requested by the employer.
12 See, e.g., Pagenkopf v. Chatham Elec., Inc., 165 P.3d 634 (Alaska 2007).
13 Sharp v. Fairbanks Northstar Borough, 569 P.2d 178 (Alaska 1977) (Parental supervision of students was supervening cause of plaintiff’s injuries, precluding liability of school district.)
Arizona
Kurt Kroese Chandler & Udall, LLP 4801 East Broadway Blvd. Suite 400 Tucson, AZ 85711 520-623-4353 Fax: 520-792-3426 [email protected]
Phillip H. Stanfield Jones Skelton & Hochuli, PLC 2901 N. Central Avenue Suite 800 Phoenix, AZ 85012-2703 602-263-1745 Fax: 602-200-7877 [email protected] A. Elements of Proof for Derivative Negligence Claims: Negligent Entrustment, Hiring/Retention and Supervision
1. Respondeat Superior
An employer may be liable for injuries caused by an employee under the doctrine of Respondeat Superior. Santiago v. Phoenix Newspapers, Inc., 164 Ariz. 505, 794 P.2d 138 (1990); Haralson v. Fisher Surveying, Inc., 201 Ariz. 1, 31 P.3d 114 (2001). The employer is liable for the foreseeable acts committed by an employee acting within the scope of the employee=s employment in furtherance of the employer=s business. Pruitt v. Pavelin, 141 Ariz. 195, 685 P.2d 1347 (1984). An employer may also be liable for the employee=s torts that occur outside the scope of employment when the employer entrusts the custody and control of a dangerous instrumentality to the employee. Macneil v. Perkins, 84 Ariz. 74, 324 P.2d 211 (1958).
Thus, an employer may be vicariously liable for torts committed by an employee that cause injury to another=s property or person even if the employer did not have any part in the commission of the tortious act. If an employer has the right to control or controls an employee=s actions, then the employee is an Aemployee@ and the employer is potentially subject to vicarious liability for the employee=s tortious acts. McDaniel v. Troy Design Services Company, 186 Ariz. 552, 925 P.2d 693 (1996).
2. Negligent Entrustment
a. Elements
Plaintiff must prove:
1. That defendant owned or controlled the vehicle; 2. Defendant gave the driver permission to operate the vehicle; 3. The driver, by virtue of his physical or mental condition, was incompetent to drive safely; 4. The defendant knew or should have known that the driver, by virtue of his physical or mental condition, was incompetent to drive safely; 5. Causation; and, 6. Damages.
See, Acuna v. Kroack, 212 Ariz. 104, 128 P.3d 221 (2006). The entrustor can be negligent under this theory, regardless of whether the employee driver was acting within the course and scope of employment. See, Ogden v. J. M. Steel Erecting, Inc., 201 Ariz. 32, 31 P.3d 806 (2002).
2
b. Examples
In Ogden v. J.M. Steel Erecting, Inc., Id., the parties stipulated to the negligence of the intoxicated employee. The jury returned a verdict against the employer, but found no fault on the admittedly negligent employee. The court remanded for a new trial because in order for an employer to be held liable for negligent entrustment, the employee must have committed a tort. The jury must find some degree of negligence on the part of the primary tortfeasor to find against the employer on a derivative tort claim. See also, Tellez v. Saban, 188 Ariz. 165, 933 P.2d 1233 (1996) (car rental agency not negligent per se for entrusting unlicensed driver who rented vehicle, but issue of fact existed as to whether renting to an unlicensed driver without investigating the reason for the absence of a license; absence of license may create unreasonable risk of harm to public); Neihaus v. Southwestern Groceries, Inc., 127 Ariz. 287, 619 P.2d 1064 (1980) (owner of company van not liable on basis of negligent entrustment of van to employee where employee=s use of van at time of accident was unauthorized).
3. Negligent Hiring and Supervision
a. Elements
Arizona follows the Restatement Second Agency ' 213 as a general rule for deciding cases of negligent hiring and supervision. It states that an employer conducting an activity through employees or agents of the employer is subject to liability for harm to a third party if the employer is negligent or reckless in:
1. Giving improper or ambiguous orders or in failing to make proper regulations of employees; 2. The employment of improper persons for work involving risk or harm to others; 3. The supervision of the employee=s activities; or, 4. Permitting or failing to prevent, negligent or other tortious conduct by persons, whether or not the employer=s employees upon the premises of instrumentalities are under the employer=s control.
To be independently liable for negligence in hiring, retention or supervision, the employer must have known or had reason to know that there was an undue risk of harm to a third person by the employee prior to any harm occurring. Kassman v. Busfield Enterprises, Inc., 131 Ariz. 163, 639 P.2d 353 (Ct. App. 1981).
b. Examples
3
See, Kassman v. Busfield Enterprises, Inc., id., (employer bar not liable for negligent supervision or hiring of doorman when doorman shoots and injures fleeing customer thought to be committing robbery - no evidence showing doorman known to be vicious or careless person when hired); Pruitt v. Pavelin, 141 Ariz. 195, 685 P.2d 1347 (1984) (realty company liable on theory of negligent hiring when employee realtor defrauded a party to a sale by forging signatures when realty company actively helped employee after learning of fraud); Irving Investors v. Superior Court, 166 Ariz. 113, 800 P.2d 979 (1990) (employer not independently negligent when employer learned of employee misconduct after the fact and the tortfeasor employee was acting outside the scope of employment).
B. Defenses
Defenses depend on the facts of a particular case. With derivative claims, traditional tort defenses may apply such as comparative fault, mitigation of damages, causation, etc. There is no specific case in Arizona holding that admission of Respondeat Superior liability precludes independent action against employer for negligent supervision or hiring or negligent entrustment. However, Arizona will follow the Restatement of Torts, absent contrary authority.
C. Punitive Damages
Arizona courts will hold employers liable for punitive damages under a theory of Respondeat Superior. Wiper v. Downtown Development Corp., 152 Ariz. 309, 732 P.2d 200 (1987). Arizona courts have specifically rejected the Restatement Second, Torts '909 (1979). If an employee commits a tort with an evil mind in furtherance of the employer=s business and within the scope of the employee=s employment, the employer may be subject to a possible award of punitive damages based on the employee=s conduct. Jacobsen v. Superior Court, 154 Ariz. 430, 743 P.2d 410 (1987). If punitive damages are not awardable against the employee, they will not be awarded against the employer unless the employer commits a separate tortious act for which the employer is liable in addition to vicarious liability. Ford v. Revlon, 153 Ariz. 38, 734 P.2d 580 (1987). Gonzalez v. City of Tucson, 124 Ariz. 450, 604 P.2d 1161 (1979).
Arizona has a heightened standard for punitive damages. To recover punitive damages, the plaintiff must prove by clear and convincing evidence that a Adefendant=s wrongful conduct was guided by evil motives or willful or wanton disregard of the interests of others.@ Piper v. Bear Med. Systems, Inc., 180 Ariz. 170, 180, 883 P.2d 407, 417 (1993). A plaintiff must prove something more than the underlying tort. Piper v. Bear Med. Systems, Id. That is, a plaintiff must prove by clear and convincing evidence that the defendant engaged in aggravated and outrageous conduct with an Aevil mind.@ Rollins v.
4 Apodaca, 151 Ariz. 149, 726 P.2d 565 (1986). Although the element of intent may be inferred, the plaintiff must also prove outwardly aggravated, outrageous, malicious, or fraudulent conduct. Linthicum v. Nationwide Life Ins. Co., 150 Ariz. 326, 723 P.2d 675 (1986).
In an interesting punitive damages case, Saucedo v. Salvation Army, 24 P.3d 1274 (2001), a Salvation Army truck struck a pedestrian. The employee was driving on a suspended license, while the pedestrian was wandering the street with a blood alcohol content of .22. The employee driver thought that he had hit a garbage bag containing aluminum cans and did not stop at the scene. The pedestrian either died on impact or shortly thereafter. The court held that the necessary intent for punitive damages must occur in tandem with the tortious conduct giving rise to the injury. In other words, the employee driver had to have caused the accident with the requisite Aevil mind@ unless leaving the scene caused or contributed to the cause of the pedestrian=s demise. Leaving the scene alone would not form the basis for punitive damages.
In Hyatt Regency v. Winston & Strawn, 184 Ariz. 120, 907 P.2d 506 (1995), a lawyer malpracticed, intentionally exposing a client to a large judgment in favor of another client, and the jury imposed punitive damages against the lawyer=s law firm under vicarious liability principles. Of note is that the court permitted evidence of the law firm=s assets and revenues in support of the plaintiff=s punitive damages claim, remarking that the punitive damages claim was approximately 3% of the firm=s yearly gross revenues. Thus, regardless of independent wrongdoing by the employer, the employer=s financial position is relevant in Arizona to support a punitive damages claim for an employee=s conduct.
5
Arkansas
Steven W. Quattlebaum Thomas G. Williams Candice S. Smith Quattlebaum, Grooms, Tull & Burrow PLLC 111 Center Street Little Rock, Arkansas 72201 Tel: (501) 379-1700 Fax: (501) 379-1701 www.qgtb.com
A. Elements of Proof for the Derivative Negligence Claims of Negligent Entrustment, Hiring/Retention and Supervision
Arkansas recognizes derivative claims of negligent entrustment, hiring, retention, and supervision against employers. These claims are premised on a theory of negligence on the part of the employer. Generally, to prevail on such claims, a plaintiff must show that the employer owed him or her a duty, that the employer breached that duty, and that this breach was the proximate cause of the plaintiff’s injury. See Kristie’s Katering, Inc. v. Ameri, 72 Ark. App. 102, 110, 35 S.W.3d 807, 812 (2000).
1. Respondeat Superior
a. What are the elements necessary to establish liability under a theory of Respondeat Superior?
The doctrine of respondeat superior assigns liability to an employee’s expected acts that are incidental to the employee’s duties or that benefit the employer; liability attaches to an employer when its employee commits a foreseeable act within the scope of his employment at the time of the incident. See Costner v. Adams, 82 Ark. App. 148, 154, 121, S.W.3d 164, 169 (2003) (citing Porter v. Harshfield, 329 Ark. 130, 136, 948 S.W.S.2d 83, 86 (1997)). See also Vaughan Hardware Co. v. McAdoo, 196 Ark. 471, 118 S.W.2d 280, 281 (1938). For the purposes of respondeat superior, whether an employee is acting within the scope of employment is not necessarily dependent upon the situs of the occurrence but on whether the individual is carrying out the object and purpose of the enterprise, as opposed to acting exclusively in his own interest. J.B. Hunt Transport., Inc., v. Doss, 320 Ark. 660, 668, 899 S.W.2d 464, 469 (1995) (citing Razorback Cab of Fort Smith, Inc. v. Lingo, 304 Ark. 323, 327, 802 S.W.2d 444, 446 (1991)).
b. Examples
In J.B. Hunt, the appellant challenged the trial court’s finding that there was no substantial evidence to support the finding that a driver was acting within the course and scope of his employment at the time of an accident. The parties stipulated that the truck involved in the accident was owned by J.B. Hunt and that the operator of the truck was an employee of J.B. Hunt. At the time of the collision, however, the operator was on his way to a truck stop to “check with a buddy;” had been drinking in violation of company’s policy; was wearing a J.B. Hunt uniform; and, planning to spend the night at the truck stop before embarking on a twelve-hour, 600-mile drive to make a delivery in Alsip, Illinois. The operator testified that under company policy, he was allowed discretion to pace his driving as he chose, provided that he made his delivery on schedule. The Court held that the operator was acting in the course and scope of his employment at the time of the accident because there was substantial evidence that the operator was engaged in an employer-approved assignment, the details of the execution of which had been entrusted to his discretion. Id. at 668, 469.
In Arkansas, the fact that a carrier possesses a certificate from the Interstate Commerce Commission and employs a non-certified independent contractor under a trip lease agreement does not create automatically an employer/employee relationship for the purpose of establishing derivative liability for the independent contractor’s negligence. See Julian Martin, Inc. v. Ind. Refrigeration Lines, Inc., 262 Ark. 671, 677-678, 560 S.W. 2d 228, 231 (1978).
In Matthews Trucking Co. v. Zimmerman, 221 Ark. 622, 625, 255 S.W.2d 168, 170 (1953), a plaintiff presented evidence that the defendant trucking company exercised specific, if not complete control over a driver not employed by the trucking company. There, the Court confirmed the jury’s finding that the driver and trucking company maintained a master/servant relationship under these circumstances.
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
The elements of a claim of negligent entrustment are: (1) the entrustee was incompetent, inexperienced, or reckless, (2) the entrustor knew or had reason to know of the entrustee's condition or proclivities, (3) there was an entrustment of the chattel, (4) the entrustment created an appreciable risk of harm to the plaintiff and a relational duty on the part of the defendant, and (5) the harm to the plaintiff was proximately or legally caused by the negligence of the defendant. Arkansas Bank & Trust Co. v. Ervin, 300 Ark. 599, 603, 781 S.W.2d 21, 23 (1989). Stated another way, a carrier can be liable if it entrusts a vehicle to an incompetent or reckless driver.
Defendants may be sued under both negligent entrustment and respondeat superior theories if the defendant generally denies liability. See LeClair v. Commercial Siding and Maint. Co., 308 Ark. 580, 582, 826 S.W.2d 247, 248 (1992). However, if the defendant admits liability under either theory, then the plaintiff may only pursue liability under the admitted theory of recovery. See Elrod v. G. & R. Constr. Co., 275 Ark. 151, 154, 628 S.W.2d 17, 19 (1982).
b. Examples
In LeClaire, an injured passenger alleged that the defendant employer was negligent for entrusting its vehicle to a driver/employee it knew, or should have investigated and learned, frequently became intoxicated and had moving traffic violations. The employer entrusted its vehicle to this employee, who in turn became intoxicated and entrusted the same vehicle to another person, who negligently operated the vehicle causing injuries to the plaintiff.
The central issue in LeClaire was whether the fact that an employee negligently entrusted the employer’s vehicle to another barred recovery from the employer due to the employee’s negligent entrustment. The Court held that two entrustments do not bar the plaintiff from seeking recovery from the employer under the negligent entrustment theory if liability of the original entrustor is predicated upon negligence in entrusting the chattel to the original entrustee. Id. at 583, 249.
3. Negligent Hiring/Retention/Supervision
a. What are the elements necessary to establish liability under the theories of negligent hiring, retention, and supervision?
Under the theories of negligent hiring, retention, and supervision, an employer may be subject to direct liability when third parties are injured as a result of the tortious acts of its employees.
The Arkansas Supreme Court utilizes a two prong test when examining claims of negligent hire: (1) is there something in the employee’s history that would have been found by an “adequate1” background check and (2) would something discovered in an “adequate” background check have put the employer on notice that the employee was predisposed to commit a violent act. See Saine v. Comcast Cablevision of Ark., Inc., 354 Ark. 492, 501, 126 S.W.3d 339, 345 (2003) (citing St. Paul Fire & Marine Ins. v. Knight, 297 Ark. 555, 562, 764 S.W.2d 601, 605 (1989)). The Saine Court determined that “[t]here must be a direct causal connection between an inadequate background check and the criminal act for which the appellant is attempting to hold the employer liable.” Id. at 501, 345. Generally, Arkansas courts will not hold an employer liable for negligent hiring when an “adequate” or reasonable inquiry into the employee’s background would not have revealed information that would have given the employer an indication that the employee likely would cause harm to others if hired. See Knight, 297 Ark. at 562, 764 S.W.2d at 605.
Negligent retention occurs when, during the course of employment, the employer becomes aware or should have become aware of problems with an employee that indicated the employee’s unfitness for duty, and the employer fails to take action such as investigating, discharging, or reassigning the employee. See Saine, 354 Ark. at 497, 126 S.W.3d at 342. “Employers cannot be required to possess clairvoyant powers to discern whether an employee should be
1 Arkansas courts have not clearly defined what constitutes an “adequate” background check. The courts appear to analyze the methods used by an employer to ascertain the tortious proclivities of a potential employee on a case-by-case basis with no bright-line rules or guidance. The courts also routinely use the words “adequate” and “reasonable” interchangeably. retained.” Id. at 561, 604. Instead, the employer’s potential liability rests upon proof that the employer knew or, through the exercise of ordinary care, should have known that the employee’s conduct would subject third parties to an unreasonable risk of harm. Id. at 562, 605.
An employer’s liability for negligent supervision rests upon proof that the employer knew or, through the exercise of ordinary care, should have known that the employee’s conduct would subject third parties to an unreasonable risk of harm. Regions Bank & Trust v. Stone County Skilled Nursing Facil., Inc., 345 Ark. 555, 568, 49 S.W.3d 107, 115 (2001); Addington v. Wal-Mart Stores, 81 Ark. App. 441, 458, 105 S.W.2d 369, 381 (2003).
b. Examples
In Saine, the plaintiff brought suit against Comcast for the negligent hiring, retention, and supervision of its employee who raped and attempted to murder the plaintiff. The trial court granted summary judgment in favor of Comcast, and the plaintiff appealed. Evidence in the record demonstrated that the plaintiff, prior to the incident in issue, called and complained to Comcast that its employee made inappropriate sexual comments to her and had unlocked her windows. Considering these facts, the Arkansas Supreme Court held that there was an issue of fact as to whether Comcast was on notice that its employee might harm a third party. In addition, the Saine Court emphasized its prior holding in Madden v. Aldrich, 346 Ark. 405, 415, 58 S.W.3d 342, 350 (2001), that it was not necessary that a particular harm to the plaintiff be foreseeable but only that the employer be on notice that it was reasonably foreseeable that an appreciable risk of harm to third parties could be caused by the negligent retention of the employee. Saine, 354 Ark. at 500, 126 S.W.3d at 342. The Court’s decision was also based upon the plaintiff’s argument that the employer did not have a system in place for recording or acting upon complaints about employees and that there was no record in employee files of prior complaints. Id.
Under Arkansas law, carriers should consider two areas when assessing the potential risk of liability for negligent hiring, retention, and supervision: (1) the steps taken by the carrier to assess whether an employee poses a potential harm to others and (2) upon receipt of information or notice that an employee might pose a potential harm to others, the measures taken to prevent harm to those to whom the carrier owes a duty of care. It is also important that a carrier have a procedure in place for tracking and then addressing information the carrier receives based on background checks performed prior to and during the course of employment or from reports from others that a certain employee may pose a danger to others.
The theory of negligent supervision is separate and distinct from the respondeat superior theory of vicarious liability, as a claim of negligent supervision does not preclude recovery where the acts committed by the employee are intentional and outside the scope of employment. Madden, 316 Ark. at 405 (emphasis added). An Arkansas employer is subject to vicarious liability for the intentional acts of its employee if the act was not unexpectable [sic] in view of the duties of the servant.” Porter, 329 Ark. at 137, 948 S.W.2d at 86 (citing Restatement (Second) of Torts, § 245 (1958)). Even if an employee acts beyond the scope of employment, a carrier’s failure to supervise and properly react to reports is an indicator that an employee’s conduct would subject third parties to an unreasonable risk of harm.
B. Defenses
1. Admission of Agency
Arkansas has adopted the majority view that once an employer has admitted the agency relationship between it and the employee, it is improper to allow a plaintiff to proceed against the employer on any other theory of derivative or dependent liability. See Elrod, 275 Ark. at 154, 628 S.W.2d at 19; Kyser, 261 Ark. at 358, 548 S.W.2d at 132.
2. Traditional Tort Defenses
Depending on the facts of a particular case, given the derivative nature of these theories, traditional tort defenses may also apply, such as comparative fault, failure to mitigate damages, superseding and intervening cause, etc.
C. Punitive Damages
1. Is evidence supporting a derivative negligence claim permissible to prove an assertion of punitive damages?
In Arkansas, mere negligence, or even gross negligence, is not sufficient to justify punitive damages. D’Arbonne Constr. Co., Inc. v. Foster, 80 Ark. App. 87, 96, 91 S.W.3d 540, 546 (2002). Under Arkansas law, “an award of punitive damages is justified only where the evidence indicates that the defendant acted wantonly in causing the injury or with such a conscious indifference to the consequences that malice may be inferred.” Yeakley v. Doss, __ S.W.3d __, 2007 WL 1560550, No.06-851, slip op. at 7 (Ark. May 31, 2007).
Malice may be inferred from the operation of a motor vehicle, and “[a] corporation may be held liable for punitive damages for acts done by its agents or servants acting within the scope of their employment.” J.B. Hunt Transport., Inc., 320 Ark. at 669, 899 S.W.2d at 469. Arkansas law does not limit evidence to support a punitive damages claim simply because such evidence may support a derivative negligence claim. The evidence would have to be inadmissible based upon the applicable rules of evidence.
2. Examples
In D’Arbonne Const. Co., Inc., 80 Ark. App. at 91, S.W.3d at 540, an accident victim brought an action against a truck driver, his employer, and others for injuries and deaths suffered when the truck crossed the center line and collided head-on into the victim’s car. There was evidence that the truck driver was speeding, that the truck had brake problems that caused the truck to pull to the left, that the brakes were so worn they could not function properly, and that the brakes had been effectively disabled so they could not lock up the truck’s wheels and the truck continue to operate. Id. at 93-94, 544-545. In support of its finding that plaintiff was entitled to punitive damages, the court stated, “there was not only evidence of gross negligence in the failure to maintain the braking and control systems of the truck and in permitting Johnson to drive it, but there was also evidence that the brakes were intentionally disabled so that the truck could continue to operate, after a fashion, despite the lack of maintenance.” D’Arbonne Constr. Co., Inc., 80 Ark. App. at 96. S.W.3d at 546. Punitive damages may also be available in cases involving intoxicated drivers. See J.B. Hunt Transport., Inc., v. Doss, 320 Ark. 660, 668, 899 S.W.2d 464, 469 (1995); Yeakley v. Doss, __ S.W.3d __, 2007 WL 1560550, No.06-851, slip op. at 7 (Ark. May 31, 2007).
California
Virginia L. Price Shareholder Klinedinst PC 501 West Broadway, Suite 600 San Diego, California 92101 Tel: (619) 239-8131 Fax: (619) 238-8707 Email: [email protected] A. California’s Law Regarding Derivative Liability of Employer for Acts of Employees in the Transportation Context
California allows an employer to be held responsible for the torts of its employees pursuant to three theories: 1) Respondeat Superior; 2) Negligent Entrustment; and 3) Negligent Hiring/Retention/Supervision.1
1. Respondeat Superior
The doctrine of respondeat superior, literally “let the master answer,” allows that an employer is vicariously liable for the wrongful conduct of his or her employees or agents committed within the scope of the employment or agency. Randi W. v. Muroc Joint Unified Sch. Dist. (1997) 14 Cal.4th 1066, 1070, 929 P2d 582. See also California Civil Code Section 2338, which states that a principal is liable to third persons for the negligence of its agent. The rationale for the doctrine lies in the fact that the principal or employer derives the benefit from the service of the agent or employee and is a better position to insure itself against losses arising out of the service. The losses caused by employee torts are placed on the employer as a cost of doing business. In order to apply the doctrine, two criteria must be established. First, the employment or agency relationship must be proven. Second, it must also be shown that the employee or agent was acting within the scope of that employment. Societa per Azioni de Navigazione Italia v. City of Los Angeles (1982) 31 Cal.3d 446, 461, 645 P.2d 102. Upon establishing these two criteria, the employer or principal can be held responsible for its employees’ torts absent any other showing of independent negligence on the part of the employer or principal.
2. Negligent Entrustment
Under the theory of negligent entrustment, liability is imposed on a vehicle owner or permitter (for our purposes, the employer) pursuant to his or her own independent negligence and not the negligence of the driver, provided that the plaintiff can prove that the harm was proximately caused by the driver’s incompetency. Under this theory, however, an entrustor may not be held liable unless the entrustee is adjudged negligent. See CACI No. 724. Establishing negligent entrustment usually requires a plaintiff to offer proof of prior accidents, moving violations, etc. and the employer’s knowledge of these prior violations which served to make the subject accident foreseeable.
1 The employer may also be held liable under a theory of permissive use, if it is the owner of the vehicle driven by it’s employee in the accident under California Vehicle Code section 17150. However, liability is limited to $15,000 per person, $5,000 for property damage, and $30,000 per accident under California Vehicle Code section 17151. 3. Negligent Hiring, Retention and Supervision
Similarly, the theories of negligent hiring, retention and supervision seek to impose liability on the employer for the employer’s own independent acts or omissions which were negligent and contributed to or caused a plaintiff’s injuries. The employer must have had reason to believe that an undue risk of harm to others would exist because of the employment. Underwriters Ins. Co. v. Purdie (1983) 145 Cal.App.3d 57, 60-62.
B. Defenses
1. Traditional Tort Defenses
Depending on the facts of a particular case, traditional tort defenses such as lack of duty, no breach, no causation, failure to mitigate damages, superseding and intervening cause, etc. can be used in defense of an employer alleged to be liable for its employees’ tort.
2. Admitting Liability under Respondeat Superior.
In Armenta v. Churchill, (1954) 42 Cal.2d 448, 267 P.2d 303, the Supreme Court of California joined the majority of jurisdictions in holding that an admission by an employer of liability, if any, for it’s employee’s alleged tort under a theory of respondeat superior removes the legal issue of the employer’s liability for the tort from the case. Id. at 309.
In Armenta, a husband driver and his employer, his spouse, were sued when he backed his dump truck over an asphalt worker. His spouse was sued under two theories, respondeat superior and negligent entrustment because she knew that her husband was a careless and reckless driver. Although the spouse admitted her liability, if any, for her husband’s actions, because he was her employee and was acting in the course and scope of his employment, the plaintiff sought to admit evidence showing that the driver had been convicted of 37 traffic violations, including a conviction for manslaughter. Id. at 308. The court held that her admission of liability pursuant to respondeat superior rendered the negligent entrustment cause of action moot and therefore the prior traffic convictions were inadmissible because there was no material issue remaining to which they would be relevant.
Since Armenta was decided, California has enacted Evidence Code section 1104 which provides that character or trait evidence is inadmissible to prove conduct on a specific occasion. Using Armenta and Evidence Code section 1104, an employer can successfully avoid a negligent entrustment cause of action by admitting liability pursuant to respondeat superior and thereby prevent the admission of inflammatory and prejudicial evidence of prior acts or omissions of the employee. Armenta and its progeny are silent on the issue of whether or not admitting liability pursuant to respondeat superior will remove other derivative liability causes of action, other than negligent entrustment, against an employer. However, the rationale behind other jurisdictions’ similar holdings that such an admission removes all derivative liability causes of action is the same as that behind Armenta. Admission of evidence for the derivative claims would prejudice the defendant, waste judicial resources, and result in a greater percentage of fault attributable to the employer than to the employee.2 Accordingly, it can be successfully argued at the trial court level that Armenta’s holding applies to all derivative liability claims against the employer, not just negligent entrustment.
C. Admissibility of Prior Acts/Omissions Evidence where Punitive Damages are Sought
Armenta and its progeny also do not address the question of whether or not evidence of prior acts or omissions by the employee which can be excluded pursuant to Evidence Code section 1104 are admissible for the purpose of proving that punitive damages are warranted against an employer for the employer’s own independent acts of negligence, even where the employer has admitted liability pursuant to respondeat superior. Their silence allows the possibility that the inflammatory evidence may be admitted by the trial court where punitive damages are sought from the employer.
In California, punitive damages against an employer for derivative liability are subject to the heightened “clear and convincing” standard. According to Civil Code section 3294, an employer can not be found liable for punitive damages based upon acts of its employee unless “the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice.” Regarding corporate employers, the advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice “must be on the part of an officer, director, or managing agent of the corporation.”
2 See McHaffie v. Bunch, (1995) 891 S.W.2d 822; Neff v. Davenport Packing Co., (1971) 131 Ill. App. 2d 791, 268 N.E.2d 574; Cole v. Alton, (1983) 567 F. Supp. 1084; Elrod v. G & R Constr. Co., (1982) 275 Ark. 151, 628 S.W.2d 17; Clooney v. Geeting, (1977) 352 So. 2d 1216; Willis v. Hill, (1967) 116 Ga. App. 848, 159 S.E.2d 145, rev'd on other grounds, 224 Ga. 263, 161 S.E.2d 281 (1968); Wise v. Fiberglass Sys., Inc., (1986) 110 Idaho 740, 718 P.2d 1178; Ledesma v. Cannonball, Inc., (1989) 182 Ill. App. 3d 718, 538 N.E.2d 655, 131 Ill. Dec. 280; Houlihan v. McCall, (1951) 197 Md. 130, 78 A.2d 661.
Colorado
Michael D. Nosler, Esq. Jeffrey D. Phipps, Esq. Rothgerber Johnson & Lyons LLP 1200 Seventeenth Street, Suite 3000 Denver, CO 80202 Phone: (303) 623-9000 Fax: (303) 623-9222 [email protected] [email protected] www.rothgerber.com
{00467647 / 1} Transportation Compendium
The following outline is intended to be a brief overview of transportation law as it pertains to the employer/employee relationship in the state of Colorado. While not all inclusive to the particular area of law, this summary should provide an understanding of the basic concepts as provided in Colorado law.
This Compendium is provided for general information purposes only. It does not solicit, establish, or continue an attorney-client relationship with Rothgerber Johnson & Lyons LLP. The contents should not be construed as legal advice or opinion.
A. RECOVERY ON DERIVATIVE LIABILITY CLAIMS
The employer's duty to members of the public stems from the principle that the employer receives benefits from having customers and business invitees and incurs responsibilities to them. Raleigh v. Performance Plumbing and Heating, 130 P.3d 1011, 1017 (Colo. 2006). In Colorado, there are multiple methods by which a non-employee third party can recover from an employer for an employee's actions.
1) Respondeat Superior
• Under the doctrine of respondeat superior, an employer is liable for torts committed by its employee or agent while acting within the scope of employment or the scope of the agency. Veintimilla v. Dobyanski, 975 P.2d 1122, 1123 (Colo. Ct. App. 1997). The doctrine "is based on the theory that the employee acts on behalf of the employer when the employee is within the scope of his or her employment." Raleigh v. Performance Plumbing and Heating, 130 P.3d 1011, 1019 (Colo. 2006). In order to succeed on the theory of respondeat superior, a plaintiff must show that the employer controlled or had the right to control the actions of its purported employee. Dobyanski, 975 P.2d at 1123; see Stokes v. Denver Newspaper Agency, LLP, 159 P.3d 691, 693 (Colo. Ct. App. 2006) (stating that an employer is liable if the employee's conduct was connected to acts the employee was authorized to perform). In such situations, the employer is vicariously liable for the employee's negligent acts. Raleigh, 130 P.3d at 1019.
• Colorado law does not recognize placard liability. However, the I.C.C. regulations do "modify traditional common law notions of respondeat superior." Schell v. Navajo Freight Lines, Inc., 693 P.2d 382, 384 (Colo. Ct. App. 1984). The regulations eliminate the defense of independent contractor by making the owner/operator of the equipment the "statutory employee" of the carrier. Id. "Thus, for liability purposes, an owner/operator of leased equipment is treated as an employee of the carrier during the term of the lease." Id.
• Example
o Schell v. Navajo Freight Lines, Inc., 693 P.2d 382 (Colo. Ct. App. 1984)Æ An interstate trucker entered into a lease with the defendant Navajo Freight Lines for
{00467647 / 1} a tractor and flatbed trailer. Id. at 383. At a later date, the trucker ran a red light and collided with another vehicle. Id. The plaintiff asserted a claim against Navajo under the theory of respondeat superior. Id. The court held that Navajo was liable for the negligent acts only if at the time of the accident the driver was acting within the scope of his employment, and that the issue was properly submitted to the jury. Id. at 384-85.
2) Negligent Entrustment
• In the state of Colorado, to recover for the negligent entrustment of a vehicle, a plaintiff "must prove that: 1) defendant permitted its employee to use a vehicle, 2) which was under defendant's control, and 3) defendant either knew or should have known that this employee was likely to use the vehicle in such a manner as to create an unreasonable risk of harm to others." Connes v. Molalla Transport Systems, Inc., 817 P.2d 567, 572 (Colo. Ct. App. 1991) (citing the RESTATEMENT (SECOND) OF TORTS § 308 (1965)), affirmed, 831 P.2d 1316 (Colo. 1992). In order to prevail, the plaintiff must show that the entrusted vehicle was used in a negligent manner and that the negligent use of the vehicle caused plaintiff's injuries. Id. The Colorado Supreme Court has held that the employee does not have to be under the employer's control at the time of the accident, and that "we need look no further than the initial point of entrustment to determine whether a supplier acted negligently." Casebolt v. Cowan, 829 P.2d 352, 360 (Colo. 1992).
• Example
o Connes v. Molalla Transport Systems, Inc., 817 P.2d 567 (Colo. Ct. App. 1991) Æ A long-haul driver sexually assaulted a hotel clerk. The hotel clerk asserted a claim for negligent entrustment against the employer. The court held that the doctrine of negligent entrustment should not be extended to include liability for an employer who entrusts a vehicle to an individual who has a criminal record, when the truck played no role in the assault. Id. at 572.
3) Negligent Hiring
• Under Colorado law, "an employer is found liable for negligent hiring if, at the time of hiring, the employer had reason to believe that hiring this person would create an undue risk of harm to others." Bear Valley Church of Christ v. DeBose, 928 P.2d 1315, 1323 (Colo. 1996). The court does not inquire into why the employee was hired, but rather "whether the specific danger which ultimately manifested itself could have reasonably been foreseen at the time of hiring." Id. The scope of the employer's duty in exercising reasonable care in a hiring decision depends on the employee's anticipated degree of contact with other persons in carrying out the job for which the employee was hired. Raleigh v. Performance Plumbing and Heating, 130 P.3d 1011, 1017 (Colo. 2006).
Negligent hiring is distinctly different from liability under the theory of respondeat superior. "The tort of negligent hiring addresses the risk created by exposing members of the public to a potentially dangerous individual, while the doctrine of respondeat superior is based on the theory that the employee is the agent or is acting for the employer." Connes v. Molalla Transport System, Inc., 831 P.2d 1316, 1320-21 (Colo. 1992). Thus,
{00467647 / 1} it must be noted that an employer can be liable for the tort of negligent hiring even when the employee's negligent act is outside the scope of employment. Id. at 1321. However, the tort of negligent hiring clearly does not function as an insurance policy for all persons injured by persons an employer hires. Raleigh, 130 P.3d at 1018.
• Examples
o Johnson v. USA Truck, Inc., 2007 U.S. Dist. LEXIS 63007 (D. Colo. 2007)Æ An employer hired a driver to operate a semi-truck. Id. at *2. The driver had worked for approximately one month as a driver for a different trucking company, where he had an "unsatisfactory" safety record and was terminated after being involved in a motor vehicle accident. Id. at *9. The employee caused an accident in bad weather. Id. at *2. The United States District Court for the District of Colorado, interpreting Colorado law, held that the material facts alleged were sufficient enough to permit a reasonable jury to find the employer liable for negligent hiring. Id. at *10-11.
o Connes v. Molalla Transport Systems, Inc., 831 P.2d 1316 (Colo. 1992)Æ A long-haul driver sexually assaulted a hotel clerk. The hotel clerk asserted a claim for negligent hiring against the employer. The court noted that the position did not require frequent contact with members of the public, and the driver's duties were restricted to the hauling of freight on interstate highways and involved only incidental contact with third persons. Id. at 1323. As such, the court held that the employer owed no duty beyond checking the employee's driving safety record and references. Id. The act perpetrated by the employee was unforeseeable, and thus outside the scope of employer liability. Id.
o Raleigh v. Performance Plumbing and Heating, 130 P.3d 1011 (Colo. 2006)Æ An employee caused an accident when he was commuting from his job on his way home from work. While the employee's truck was equipped with a company rack and tow gear, it was the employee's personal truck. Id. at 1014. The court held that the employer must play a role in bringing the employee in contact with the public. Id. at 1019. Thus, the court held that the plaintiffs were not entitled to a claim of negligent hiring, because they did not come into contact with the employee as a result of his employment, but rather because of the employee's commute from his employment. Id.
4) Negligent Supervision and Retention
• Negligent supervision and retention look beyond the employer's duty at the point of hiring, and focus on the employer's liability for acts resulting from the continued employment of an employee. "A person conducting an activity through servants or other agents is subject to liability for harm resulting from his conduct if he is negligent or reckless . . . in the supervision of the activity." Destefano v. Grabrian, 763 P.2d 275, 287 (Colo. 1988) (citing RESTATEMENT (SECOND) OF AGENCY § 213 (1958)). The employer "may be negligent because he has reason to know that the servant or other agent, because of his qualities, is likely to harm others in view of the work or instrumentalities entrusted to him." RESTATEMENT (SECOND) OF AGENCY § 213 cmt. d (1958). "While the tort of
{00467647 / 1} negligent supervision applies to instances where the employee is acting outside his scope of employment, it does not extend to all acts undertaken by an employee that are actionable in tort." Keller v. Koca, 111 P.3d 445, 448 (Colo. 2005). Furthermore, an employer "generally does not have a duty to supervise employees in their off-duty time unless the employee is on the employer's premises or possesses the employer's property." Biel v. Alcott, 876 P.2d 60, 63 (Colo. Ct. App. 1993). Ultimately, in cases of negligent supervision “liability of the employer is predicated on the employer's antecedent ability to recognize a potential employee's attributes or character or prior conduct which would create an undue risk of harm," to others subject to the employee's contact in the course of employment." Koca, 111 P.3d at 448.
• Example
o Johnson v. USA Truck, Inc., 2007 U.S. Dist. LEXIS 63007 (D. Colo. 2007)Æ A semi-truck driver caused an accident and the plaintiff pursued the employer on a negligent supervision claim. Id. at *2. The United States District Court for the District of Colorado, interpreting Colorado law, held that a "reasonable jury could find that, given . . . [the] admittedly brief, paper-based training for driving in adverse winter weather conditions, [the employer] knew or should have known that [the driver] was ill-equipped to drive in snowy or icy conditions and, therefore, posed an unreasonable risk to other drivers on Colorado roads in the dead of winter." Id. at *15.
B. DEFENSES TO DERIVATIVE CLAIMS
1) Traditional Tort Defenses
• In claims asserting derivative liability against employers, traditional tort defenses are available to the employer. In accordance with C.R.S. § 13-21-111, the state of Colorado utilizes a comparative negligence scheme, rather than the traditional contributory negligence doctrine. Another common defense is the failure to mitigate damages. In Colorado, one has a duty to use "reasonable means" to mitigate damages. Fair v. Red Lion Inn, 943 P.2d 431, 437 (Colo. 1997). However, a plaintiff has no duty to anticipate a tortfeasor's acts, and thus, only has a duty to mitigate after the injury occurs. Burt v. Beautiful Savior Lutheran Church, 809 P.2d 1064, 1068 (Colo. Ct. App. 1990), cert. denied (1991). Other defenses such as intervening causes and the absence of duty are applicable in Colorado law.
2) Non-use of Safety Belt
• Colorado law mandates that "every driver of and every front seat passenger in a motor vehicle equipped with a safety belt system shall wear a fastened safety belt while the motor vehicle is being operated on a street or highway in this state." C.R.S. § 42-4- 237(2) (2007). "Evidence of failure to comply with the requirement . . . shall be admissible to mitigate damages with respect to any person who was involved in a motor vehicle accident and who seeks in any subsequent litigation to recover damages for injuries resulting from the accident. Such mitigation shall be limited to awards for pain
{00467647 / 1} and suffering and shall not be used for limiting recovery of economic loss and medical payments." C.R.S. § 42-4-237(7) (2007).
C. PUNITIVE DAMAGES
• Generally, a plaintiff can recover for punitive damages against the defendant if the defendant acted in a malicious or willful and wanton manner in causing the plaintiff's damages. CJI-Civ. 4th 5:3 (2006). In the actions discussed above, punitive damages would be generally available if the standard is met. In the case of liability based on respondeat superior, "the principal cannot be held liable in exemplary damages for the act of an agent, unless it is shown that it authorized or approved the act for which exemplary damages are claimed; or, that it approved of or participated in the wrong of its agent; or, that it failed to exercise proper care in selecting its servants." Holland Furnace Co. v. Robson, 402 P.2d 628, 631 (Colo. 1965). In cases in which the defendant employer asserts comparative negligence as a defense, punitive damages are not subject to reduction by application of the comparative negligence statute. Lira v. Davis, 832 P.2d 240, 243-45 (Colo. 1992). However, punitive damages cannot exceed the amount of compensatory damages awarded after any reductions required by the comparative negligence statute. Id.
{00467647 / 1}
Connecticut
Richard W. Bowerman Tyler Cooper & Alcorn, LLP 555 Long Wharf Drive, 8th Floor P.O. Box 1936 New Haven, CT 06509-0906 Tel.: 203-784-8223 Fax: 203-777-1181 Email: [email protected]
1 A. Elements of Proof for the Derivative Negligence Claims of Negligent Entrustment, Hiring/Retention and Supervision.
1. Respondeat Superior
a. What are the elements necessary to establish liability under a theory of Respondeat Superior?
Connecticut adheres to the traditional principle of Respondeat Superior. Employers are vicariously liable, under the respondeat superior doctrine, for negligent acts or omissions by their employee in the course of employment. Jagger v. Mohawk Mountain Ski Area, Inc., 269 Conn. 672, 692 (2004). The doctrine of respondeat superior focuses on the employees conduct rather than on the employer’s knowledge or approval of the acts. If the employee acted with apparent authority in furtherance of the employer’s business, the employer’s consent or ratification of the misconduct is irrelevant for the purposes of determining liability. Glucksman v. Walters, 38 Conn. App. 140, 144 (1995).
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
The essential elements of the tort of negligent entrustment of an automobile are that the entrustor knows or ought reasonably to know that one to whom he entrusts it is so incompetent to operate it upon the highways that the former ought to reasonably anticipate the likelihood of injury to others by reason of that incompetence, and such incompetence does result in injury. Liability cannot be imposed on a defendant under a theory of negligent entrustment simply because the defendant permitted another person to operate the motor vehicle. Liability can only be imposed if (1) there is actual or constructive knowledge that the person to whom the automobile is loaned is incompetent to operate the motor vehicle and (2) the injury resulted from that incompetence. Greeley v.Cunningham, 116 Conn. 515, 520 (1933).
3. Negligent Retention/Hiring
a. What are the elements necessary to establish liability under theory of negligent retention?
To assert a derivative claim based on negligent retention, a plaintiff must plead: (1) that an employer, during the course of employment, became aware of problems that indicate an employee’s lack of fitness for a particular position; (2) the unfitness is likely to cause a harm similar to the harm the plaintiff incurred; and (3) the employer failed to take action. See Faggio v. Brown, 2006 Conn. Super LEXIS 1469 (Conn. Super. May 16, 2006).
2 b. What are the elements necessary to establish liability under a theory of negligent hiring?
In order to prevail in an action alleging negligent hiring, a plaintiff must plead and prove that an employer knew or should have known of an employee’s past activities and that knowledge was enough to notify the employer of the likelihood the employee would engage in similar conduct that would cause a third party injury. Demaria v. Country Club of Farfield, 2006 Conn. Super. LEXIS 232 (Conn. Super. Jan. 17, 2003); See also Vasudevan v. Pragosa, 2006 Conn. Super. LEXIS 207 (Conn. Super. Jan. 20, 2006) (holding that employer should have known its employee had the propensity to engage in conduct which would breach duty owed to third party).
4. Negligent Supervision
a. What are the elements necessary to establish liability under a theory of negligent supervision?
To assert a claim based on negligent supervision, a plaintiff must plead and prove that defendant had a duty to supervise and knew or should have known that a particular behavior would have caused injury of the general nature of the kind suffered by the plaintiff. Companions & Homemakers, Inc. v. Pogasnik, 2005 Conn. Super. LEXIS 1495 (Conn. Super. June 7, 2005); Zides v. Quinnipiac University, 2003 Conn. Super. LEXIS 3444 (Conn. Super. Dec. 15, 2003).
b. It should be noted that negligent hiring, negligent supervision and negligent retention are very similar and in Connecticut have evolved from the considerations of duty and foreseeability. See generally Gutierrez v. Thorne, 13 Conn. App. 493, 537 (1988); Seguro v. Cumminskey, 82 Conn. App. 186, 844 (2004). They are long recognized causes of action in the State of Connecticut. Stiebitz v. Mahoney, 144 Conn. 443, 447 (1957) (recognizing a “duty to appoint proper persons to the police force and to remove or suspend officers who might indulge in…outrageous acts of force and indecency”).
B. Defenses
1. Admissions of Agency/Vicarious Liability
Derivative negligence claims such as negligent hiring, supervision and retention are direct claims of negligence that do not depend on vicarious liability imposed on an employer via the doctrine of respondeat superior. Gutierrez v. Thorne, 13 Conn. App. 493, 537 (1988). The derivative claims exist independently because they allege negligence directly against an employer who failed to exercise reasonable care. Seguro v. Cumminskey, 82 Conn. App. 186 (2004). It is a special type of liability where a third party is injured not by an employee’s negligence, but by the employer’s own
3 negligence in failing to select an employee fit or competent to perform the services of employment. Shore v. Stonington, 187 Conn. 147, 155 (1982).
2. Traditional Tort Defenses
Depending on the facts of a particular case, traditional tort defenses may also apply such as comparative fault. In Connecticut, contributory negligence is not a bar to recovery. If the plaintiff’s negligence is not greater than the combined negligence of all the defendants, he or she will not be barred from recovery; rather, the damages will be diminished in proportion to the percentage of the plaintiff’s own negligence. C.G.S. § 52- 572h.
A plaintiff who has been injured by the negligence of another must act in good faith and use reasonable care to minimize the resulting losses and damages and to prevent any aggravation or increase of the injuries. Burns v. Hanson, 249 Conn. 809, 831 (1999). A failure of a plaintiff to mitigate his or her damages results in a reduction of damages accordingly.
C. Punitive Damages
1. Is evidence supporting a derivative negligence claim permissible to prove an assertion of punitive damages?
Punitive damages are damages not awarded in order to compensate the plaintiff, but in order to punish, reform or deter the defendant for the conduct that damaged the plaintiff. Common law punitive damages in Connecticut are limited to the plaintiff’s attorney’s fees and nontaxable costs, and thus serve a function that is both compensatory and punitive. Bodner v. United Servs. Auto Ass’n, 222 Conn. 480, 492 (1992). Because they usually compensate the plaintiff in excess of the plaintiff’s provable damages, punitive damages are only awarded in special cases or if allowed by statute.
With respect to common law claims, for a plaintiff to receive an award of punitive or exemplary damages, evidence must reveal a reckless indifference to the rights of others or an intentional or wanton violation of those rights. Venturi v. Savitt, Inc., 191 Conn. 588, 593 (1983). The basic requirement to justify an award of punitive damages is described in terms of wanton and malicious injury, evil motive and violence. Damages may not exceed the amount of the expenses of the suit, less taxable costs and it is essential to the award of punitive damages for the plaintiff to offer evidence of what those damages are.
Similar to a claim for common law punitive damages, most statutes that allow a claim for statutory punitive damages likewise require some evidence of reckless or wanton conduct on the part of the tortfeasor to justify an award of damages.
4 Punitive damages are not allowable under common law agency principles such as vicarious liability. Maisenbecker v. Society Concordia, 71 Conn. 369, 380 (1899); Champagne v. Raybestos-Manhatten Inc., 212 Conn. 509, 532 (1989).
5
District of Columbia
Tamara B. Goorevitz Franklin & Prokopik, P.C. 2 North Charles Street Suite 600 Baltimore, Maryland 21201 Tel: (410) 230-3625 Fax: (410) 752-6868 Email: [email protected]
A. Elements of Proof for the Derivative Negligence Claims of Respondeat Superior, Negligent Entrustment, Hiring/Retention and Supervision
In the District of Columbia, an employer may be held responsible for the torts of an employee driver under three distinct theories: respondeat superior, negligent hiring and retention, and negligent entrustment. Employers, generally, are not liable for the acts of independent contractors, as opposed to employees. However, there are limits to this immunity from liability. Wilson v. Good Humor Corp., 757 F.2d 1293, 244 U.S. App. D.C. 298 (1985).
1. Respondeat Superior
Under this doctrine, an employer may be held vicariously liable for tortious acts proximately caused by an employee, as long as those acts are within the scope of employment. In order to prevail under this theory of recovery, a plaintiff must prove (1) a master and servant relationship between employer and employee; (2) that the employee was in the process of his employer’s business at the time of the tort; and (3) that the employee was in the scope of his employment at the time of the tort.
The scope of the employment is defined as “incidental” to an employer’s business and done “in furtherance of” the employer’s business. An employee who deviates far from his duties has taken himself out of the scope of the employment. However, an employee’s willful or malicious act may still be within the scope of employment.
Employers typically cannot be liable for the acts of independent contractors because no master and servant relationship exists. However, the courts will examine each case individually. If a party has the right to control and direct the actions of an independent contractor in the performance of his or her work and the manner in which the work is to be done, then a court may find that a master and servant relationship exists, and liability is possible. Beegle v. Restaurant Management, Inc., 679 A.2d 480 (D.C. 1996).
2. Negligent Hiring and Retention
In order to establish a claim for negligent hiring or retention, a plaintiff must prove that the employer of the individual who committed the allegedly tortious act negligently placed an unfit person in an employment situation involving unreasonable risks of harm to others. Stumpner v. Harrison, 136 A.2d 870 (D.C. Mun. App. 1957). The District of Columbia has also recognized negligent retention of an independent contractor.
3. Negligent Entrustment
An employer who allows an employee to use a vehicle or other property when the employer knows or has reason to know that because of the employee’s youth, inexperience, physical or mental disability, or otherwise, the employee may use the vehicle or property in a manner involving unreasonable risk of physical harm to oneself and others, is subject to liability.
B. Defenses
1. Admission of Agency
D.C. Courts have recognized the validity of the majority view that when an employer has stipulated to the agency relationship between it and the employee, it is improper to allow a plaintiff to proceed against the employer on negligent hiring, retention, and supervision claims. Hackett v. Washington Metropolitan Area Transit Authority, 736 F.Supp. 8, 11 (D.D.C. 1990). The rationale behind this is that these additional claims would not impose any additional liability upon an employer where an employer has admitted that a driver was acting in the scope of his employment with respect to a respondeat superior claim. Id at 11.
In Hackett, the defendant employer sought to have the negligent entrustment claim dismissed because evidence of the bus driver employee’s driving record was admissible to prove the negligent entrustment claim but not the respondeat superior claim. Id. at 9. As the Court agreed that the negligent entrustment claim would not impose any additional liability and therefore should be dismissed, the employer, by stipulating to agency, was able to avoid the admission of a driving record that likely would have unduly influenced the verdict of the jury. Id. at 11.
2. Traditional Tort Defenses
a. Statute of Limitations
For negligence causes of action alleging personal injury or property damage, the statute of limitations is 3 years. D.C. Code _ 12-301(3).
b. Contributory Negligence
The District of Columbia is a “contributory negligence” jurisdiction. Therefore, a lack of reasonable care on the part of the plaintiff, however slight, even one percent, is a complete bar to recovery if such negligence contributes to the plaintiff's injury. Aetna Casualty & Surety Co. v. Carter, 549 A.2d 1117 (D.C. 1988). The evidence must show that the plaintiff's conduct did not conform to the standard of what a reasonable person of like age, intelligence, and experience would do under the circumstances for his own safety and protection. The burden is on the defendant to prove plaintiff's contributory negligence by a preponderance of evidence standard.
c. Assumption of the Risk
A plaintiff is completely barred from recovery if he or she assumes the risk of injury when, with full knowledge and understanding of an obvious danger, he or she voluntarily exposes himself or herself to that risk of injury. Janifer v. Jandebeur, 551 A.2d 1351 (D.C. 1989). The doctrine of assumption of risk requires showing: (1) that the nature and extent of the risk are fully appreciated; and (2) that the risk is voluntarily incurred. There are certain risks which anyone of adult age must be able to appreciate, including the danger of slipping on ice, falling through unguarded openings, and lifting heavy objects.
Assumption of the risk is a corollary doctrine to the contributory negligence defense, and the distinctions between the two generally depend upon the conduct and intent of the plaintiff. If the plaintiff acts with an understanding of the risks he or she faces, and the likelihood of injury is known, then he or she may be found to have assumed the risk. Alternatively, if the plaintiff acts without careful contemplation of his or her proposed actions and the consequences of the same, then plaintiff may be found to have been contributorily negligent.
C. Punitive Damages
Generally, the law of the District of Columbia disfavors punitive damages. In a negligence action, punitive damages may be awarded only when there is also a verdict assessing compensatory or other actual damages. Franklin Investment Co., Inc. v. Smith, 383 A.2d 355 (D.C. 1978).
To sustain an award of punitive damages, the plaintiff must prove, by clear and convincing evidence, that the tortfeasor acted with evil motive or actual malice. Daka, Inc. v. Breiner, 711 A.2d 86 (D.C. 1998).
Florida
Kurt M. Spengler Wicker, Smith, O’Hara, McCoy & Ford, P.A. 390 N. Orange Ave., Suite 1000 Orlando, Florida 32802 Tel: (407) 843-3939 Fax: (407) 649-8118 Email: [email protected]
Christopher Barkas Carr Allison, P.A. 305 S. Gadsden Street Tallahassee, Florida 32301 Tel: (850) 222-2107 Fax: (850) 222-8475 Email: [email protected]
L. Johnson Sarber III Marks Gray, P.A. 1200 Riverplace Boulevard, Suite 800 Jacksonville, Florida 32207 Tel: (904) 398-0900 Fax: (904) 399-8440 Email: [email protected]
A. Elements of Proof for the Derivative Negligence Claims of Negligent Entrustment, Hiring/Retention and Supervision
1. Respondeat Superior
a. What are the elements necessary to establish liability under a theory of Respondeat Superior?
Under Florida law, an employer is only vicariously liable for an employee's acts if the employee was acting to further the employer's interest through the scope of the employee’s employment at the time of the incident. An employee acts within the scope of his employment only if (1) his act is of the kind he is required to perform, (2) it occurs substantially within the time and space limits of employment, and (3) is activated at least in part by a purpose to serve the master. Kane Furniture Corp. v. Miranda, 506 So.2d 1061 (Fla. 2d DCA 1987).
Additionally, once an employee deviates from the scope of his employment, he may return to that employment only by doing something which meaningfully benefits his employer's interests. Borrough’s Corp. v. American Druggists’ Insur. Co., 450 So.2d 540 (Fla. 2d DCA 1984).
Florida has addressed the placard liability issue in the following manner: where a defendant's name appears on a commercial vehicle involved in an accident, there is a rebuttable presumption that (i) the vehicle is owned by the defendant, (ii) the operator of the vehicle is an employee of the defendant, (iii) and was, at the time of accident, engaged in the scope of his employment and in furtherance of his master's business. Crowell v. Clay Hyder Trucking Lines, Inc., 700 So.2d 120 (Fla. 2d DCA 1997); Carrazana v. Coca Cola Bottling Co., 375 So.2d 345 (Fla. 3d DCA 1979).
b. Recommended Reading
i. Makris v. Williams, 426 So.2d 1186 (Fla. 4th DCA 1983) – holding that employer fault is not an element of a respondeat superior claim for compensatory damages. ii. Iglesia Cristiana La Case Del Senor, Inc. v. L.M., 783 So.2d 353 (Fla. 3d DCA 2001) – under the doctrine of respondeat superior, an employer cannot be held liable for the tortious or criminal acts of an employee, unless the acts were committed during the course of the employment and to further a purpose or interest, however excessive or misguided, of the employer.
2
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
Florida has not specifically enumerated elements for an action based on the theory of negligent entrustment. Rather, Florida’s “dangerous instrumentality doctrine” would apply to a negligent entrustment action arising from a trucking accident. The “dangerous instrumentality” doctrine holds that the owner of a dangerous instrumentality, for example a commercial truck, who entrusts its use to another, is liable for the negligence of the person to whom the instrumentality is entrusted. Sun Chevrolet Inc. v. Crespo, 613 So.2d 105 (Fla. 3d DCA 1993). This doctrine only applies to the negligence of the entrusted individual, and not intentional misconduct, as intentional misconduct has been deemed unforeseeable. Id.
Furthermore, for the “dangerous instrumentality” doctrine to properly lie, the employer must be negligent at the time of the initial entrustment, not after the fact. Ruano v. Water Sports of America, Inc., 578 So.2d 385 (Fla. 3d DCA 1991).
b. Recommend Reading
i. State Farm Mut. Auto. Ins. Co. v. Austin Outdoor Inc., 918 So.2d 446 (Fla. 4th DCA 2006) - Genuine issue of material fact existed as to whether driver of landscaping company's truck involved in motor vehicle accident was operating vehicle with company's permission, or was instead a thief, precluding summary judgment on issue of whether company was liable under dangerous instrumentality doctrine.
ii. Ryder TRS, Inc. v. Hirsch, 900 So.2d 608 (Fla. 4th DCA 2005) - To vitiate the initial consent of truck owner as to use of truck by person to whom owner entrusted truck to and deem the truck no longer on the public highways by authority of the owner, for purposes of dangerous instrumentality doctrine, the truck must be shown to have been the subject of a theft or conversion.
iii. Kumarsingh v. PV Holding Corp., 2007 WL 2847956 (Fla. 3d DCA 2007) – Automobile rental company could not be held vicariously liable to motorist who was injured in collision with rented automobile and who filed suit after the effective date of the Graves Amendment, which provides that a lessor of a motor vehicle should not be held liable under state law for harm arising
3 out of use of the vehicle during the lease period if the owner is engaged in the trade of renting vehicles and there is no owner negligence or criminal wrongdoing.
3. Negligent Hiring/Retention/Supervision
a. What are the elements necessary to establish liability under a theory of negligent hiring/retention/supervision?
In Florida, the test for all three theories is as follows: (1) the employer was required to make an appropriate investigation of an employee and failed to do so; (2) an appropriate investigation would have revealed the unsuitability of the employee for the particular duty to be performed or for the employment in general; and (3) it was unreasonable for the employer to hire, retain or fail to supervise the employee in light of the information he or she knew or should have known. Malicki v. Doe, 814 So.2d 347 (Fla. 2002); Garcia v. Duffy, 492 So.2d 435 (Fla. 2d DCA 1986).
The primary distinction between these three theories of recovery lies at the moment the employer becomes aware, or should have become aware, of the information that makes the employee unfit for employment. Tallahassee Furniture Co., Inc. v. Harrison, 583 So.2d744 (Fla. 1st DCA 1991).
In determining whether an employer’s investigation was reasonably performed, the scope of the employment responsibilities will dictate the breadth of the requisite investigation into the employee’s background. Jenkins v. Milliken, 498 So.2d 495 (Fla. 2d DCA 1986).
Florida adheres to the rule held by the vast majority of jurisdictions that where a plaintiff seeks to impose liability on the driver's employer under theories of both respondeat superior and negligent employment, and the employer admits that it is vicariously liable for its driver's actions, the plaintiff may not proceed on the negligent employment claims. Clooney v. Geeting, 352 So.2d 1216 (Fla. 2d DCA 1977).
An issue that remains to be decided in Florida is whether a plaintiff can admit a commercial driver’s driving record against the employer in support of a punitive damages claim that arises out of a negligent hiring/retention/supervision claim. Although the driving record is inadmissible as to the negligence counts, at least one court has alluded to the possibility that the driving record is admissible as it relates to a properly submitted punitive damages claim. See Clooney v. Geeting, 352 So.2d 1216 (Fla. 2d DCA 1977).
4
b. Recommended Reading
i. Tallahassee Furniture Co., Inc. v. Harrison, 583 So.2d 744 (Fla. 1st DCA 1991) - Element of foreseeability was established in action for negligent hiring and retention brought by customer violently attacked by employee; customer established correlation between employee's history of unlawful and violent behavior, drug abuse and mental illness and employee's propensity for future dangerousness.
ii. Anderson Trucking Service, Inc. v. Gibson, 29 Fla. L. Weekly D2293 (Fla. 5th DCA 2004) - The reason that negligent hiring is not a form of vicarious liability is that, unlike vicarious liability, which requires that the negligent act of the employee be committed within the course and scope of the employment, negligent hiring may encompass liability for negligent acts that are outside the scope of the employment.
iii. Island City Flying Service v. Gen. Elec. Credit Corp. 585 So.2d 274 (Fla. 1991) - Flying service was not negligent in hiring employee who had military prison record and who twice had been fired by flying service, and thus could not be held liable for employee's post-rehire theft of airplane, absent showing of similarity between prior offenses and theft such as would have made theft foreseeable.
iv. Riddle v. Aero Mayflower Transit Co., 73 So.2d 71 (Fla. 1954) - The business of the corporation was that of a common carrier in moving household goods. The employee was engaged by the common carrier to assist in carrying on that business and not for the purpose of committing an assault. Negligent supervision will not lie as the assault was in no way connected with the business of the common carrier.
B. Defenses
1. Traditional Tort Defenses
Generally, the cases in which these claims arise are those that avail themselves to the traditional tort defenses found in most civil matters.
5
C. Punitive Damages
1. For employer’s actions.
In Florida, an employer may be held liable for punitive damages only if the trier of fact, based on clear and convincing evidence, finds that the employer was personally guilty of intentional misconduct or gross negligence. §768.72, Florida Statutes (2007). Even then, the punitive damages award will generally be limited to the greater of three times the amount of compensatory damages or $500,000. §768.73, Florida Statutes (2007).
2. For employee’s actions.
In the case of an employer, principal, corporation, or other legal entity, punitive damages may be imposed for the conduct of an employee or agent only if the conduct of the employee or agent meets the criteria specified directly above and: i. The employer actively and knowingly participated in such conduct; ii. The managers of the employer knowingly condoned, ratified, or consented to such conduct; or iii. The employer engaged in conduct that constituted gross negligence and that contributed to the loss, damages or injury suffered by the claimant. §768.72, Florida Statutes (2007).
3. Recommended cases c. Partington v. Metallic Engineering Co., Inc., 792 So.2d 498 (Fla. 4th DCA 2001) - Issue of whether employee's job foreman knew that employee was intoxicated when employee left job site to drive a truck on company business, such that employee's corporate employer would be independently negligent for injuries to motorist involved in collision with employee, was for the jury, in motorist's action seeking to hold employer vicariously liable for punitive damages. d. U.S. Concrete Pipe Co. v. Bould, 437 So.2d 1061 (Fla. 1983) - Jury could not impose punitive damages against company solely for company's active negligence in retaining employee.
6
Georgia
Mark A. Barber Hall Booth Smith & Slover, P.C. 1180 West Peachtree Street, Suite 900 Atlanta, GA 30319 Tel: (404) 954-5000 Fax: (404) 954-5020 Email: [email protected] ELEMENTS OF PROOF FOR DERIVATIVE NEGLIGENCE CLAIMS
1. RESPONDEAT SUPERIOR (Let the Master Answer)
If an employee is on company business at the time of the accident, his employer is vicariously responsible for any negligence committed on his part. O.C.G.A. §51-2-2; Allen Kane's Major Dodge, Inc. v. Barnes, 243 Ga. 776 (1979); Wright v. Pine Hills Country Club, Inc., 583 S.E.2d 569 (Ga.App. 2003).
In the motor carrier context, scope of employment has been broadly defined. For example, where a driver is waiting at a truck stop for the next dispatched load, he can be considered in the scope of the master's business. Wright v. Transus, Inc., 209 Ga. App. 771, 434 S.E.2d 786 (1993).
a. Lease Liability
Georgia recognizes the concept of "lease liability," and in any case where the accident occurs during the term of the lease liability will be imposed on the motor carrier irrespective of whether the driver was technically in the scope of employment for the motor carrier. Hot Shot Express, Inc. v. Assicurazioni Generali, S.P.A., 252 Ga. App. 372, 556 S.E.2d 475 (2001); Nationwide Mut. Ins. Co. v. Holbrooks, 187 Ga. App. 706, 371 S.E.2d 252 (1988).
2. NEGLIGENT ENTRUSTMENT
Under the theory of negligent entrustment, liability is predicated not on the doctrine of “scope of employment” but on a negligent act of the owner in lending his automobile to another to drive when the owner of the vehicle has actual knowledge that the driver is incompetent or habitually reckless. This negligence must concur, as a part of the proximate cause, with the negligent conduct of the driver on account of his incompetence and recklessness. Cherry v. Kelly Services, Inc., 319 S.E.2d 463 (Ga. App. 1984); Spencer v. Gary Howard Enterprises, Inc., 256 Ga. App. 599 (2002); Western Industries, Inc. v. Poole, 280 Ga.App. 378, 634 S.E.2d 118 (2006). In motor carrier cases, however, where the motor carrier has a legal duty to check the driver's qualifications, the Federal Motor Carrier Safety Regulations may establish constructive knowledge of driver information that would have been revealed by a proper driver qualification. 49 C.F.R. § 391 et seq.; Smith v. Tommy Roberts Trucking Co., 209 Ga. App 826 (1993).
3. NEGLIGENT HIRING, RETENTION AND SUPERVISION
The Georgia Code provides that an employer is bound to exercise ordinary care in the selection of employees and not to retain them after knowledge of any incompetence. O.C.G.A. § 34-7-20.
The negligent selection and retention of incompetent servants allows a plaintiff who is injured as a result of this negligence to bring a cause of action against the employer. To sustain a claim for negligent hiring or retention, a plaintiff must show that the employer knew or should have known of the employee's propensity to engage in the conduct which caused the plaintiff's injury. The Supreme Court has now added that the defendant/employer has a duty of exercising ordinary care not to hire or retain an employee the employer knows or should have known poses a risk of harm to others, where it is reasonably foreseeable from the employee’s tendencies or propensities that the employee could cause the type of harm sustained by the plaintiff. In Munroe v. Universal Health Services, Inc., 227 Ga. 861, 596 S.E.2d 604 (2004). The same standard is applied with respect to negligent supervision claims. Alexander v. A. Atlanta Autosave, Inc., 272 Ga. App. 73, 77, 611 S.E.2d 754 (2005).
Specifically, a plaintiff can establish liability "only by showing that an employer had actual knowledge of numerous and serious violations on its driver's record, or, at the very least, when the employer has flouted a legal duty to check a record showing such violations." Western Industries, Inc. v. Poole, 280 Ga. App. 378, 381-82, 634 S.E.2d 118 (2006). The key is whether there is any evidence to suggest that the employee was incompetent in the first place. For example, if his driving record does not contain any violations that would alert an employer that he was not competent to drive, then the employer may avoid liability. If the employer conducted all of the necessary steps in order to properly evaluate the employee's driving capabilities; conducted an extensive review of his driver’s record before he was hired, which included sending for records from his previous employer; and continued to monitor his driving while he was employed, then employer can avoid liability. In addition, under the new standard, without some evidence to suggest that the specific harm suffered by the plaintiff was reasonably foreseeable based on the specific tendencies or propensities of the employee, the employer may avoid liability. However, if the court finds a violation of the federal motor carrier safety regulations (which would have been revealed by a proper driver qualification file), summary judgment on negligent hiring can be authorized against the motor carrier, and a jury issue can also be created on punitive damages. Smith v. Tommy Roberts Trucking Co., 209 Ga. App. 826 (1993); Meyer v. Trux Transp., Inc., 2006 U.S. Dist. LEXIS 81869 (N.D. Ga. 2006).
It remains a requirement for a negligent hiring, retention, and supervision claim that that the employee actually be in the scope of employment at the time of the accident. Lear Siegler v. Stegall, 184 Ga. App. 27, 360 S.E.2d 619 (1987).
4. NEGLIGENT TRAINING
There is no specific case finding a tort based on this theory. It is usually lumped with negligent supervision, and then analyzed using the same theories as negligent hiring and retention. Remediation Resources, Inc. v. Balding, 281 Ga. App. 31, 635 S.E.2d 332 (2006). Some cases have discussed the facts particular supporting liability under this theory but without really giving any legal analysis about what is required for a prima facia to be shown. Ledbetter v. Delight Wholesale Co., 191 Ga. App. 64, 380 S.E.2d 736 (1989).
5. NEGLIGENT MAINTENANCE
Under Georgia law, there is a statutory duty for an owner of a vehicle to keep its vehicle in good working order. O.C.G.A. 40-8-50(a); Lewis v. Harry White Ford, 129 Ga. App. 318, 319(2), 199 S.E.2d 599 (1973). Thus, an owner who permits another to operate the vehicle when the owner knows or should know that the vehicle is not in repair is liable for injuries proximately caused by the defect. Cantrell v. U-Haul Company of Georgia, Inc., 224 Ga. App. 671, 482 S.E.2d 413 (1997). A defendant can defeat such a claim if it can establish that regular maintenance and servicing of the vehicle occurred prior to the accident and that this regular maintenance did not reveal any problems that would alert the owner that something was defective.
DEFENSES, PUNITIVE DAMAGES AND WRONGFUL DEATH
1. ADMISSION OF AGENCY IN DIRECT NEGLIGENCE CLAIMS
Once it is conceded that the employer is in fact vicariously liable for negligence of the employee under a theory of respondeat superior, then direct negligence claims (negligent hiring, retention, entrustment, etc.) are moot, and evidence supporting them is rendered irrelevant, and inadmissible. See Bartja v. National Union Fire Ins. Co. of Pittsburgh, 218 Ga. App. 815 (1995); Durben v. Am. Materials, 232 Ga. App. 750, 503 S.E.2d 618 (1998); Scroggins v. Yellow Freight Sys., 98 F. Supp. 2d 928 (E.D. Tenn. 2000) .
The exception to this rule is where a separate punitive damage claim is brought against the motor carrier. In these cases, the claim is that the employer's conduct justifies a separate award of punitive damages. Thus, it is the conduct of the Employer that is considered in awarding punitive damages and not the actions of the employee. Clarke v. Cotton, 263 Ga. 861, 440 S.E,.2d 165 (1994). For cases considering punitive damages in trucking-direct negligence cases, see Smith v. Tommy Roberts Trucking Co., 209 Ga. App. 826 (1993); Meyer v. Trux Transp., Inc., 2006 U.S. Dist. LEXIS 81869 (N.D. Ga. 2006); Hutcherson v. Progressive Corp., 984 F.2d 1152 (11th Cir 1993); and Bartja v. National Union Fire Ins. Co. of Pittsburgh, 218 Ga. App. 815 (1995).
2. PUNITIVE DAMAGES AND THE TRUCKING CASE
If the employee's conduct warrants imposition of punitive damages, the employer is also liable for these. Sightler v. Transus, Inc., 208 Ga. App. 173, 430 S.E.2d 81 (1993). Where a plaintiff has a valid claim for punitive damages against the employer based on its independent wrongdoing in hiring, retaining or supervising the employee or entrusting a vehicle to that employee (which must be a higher standard of culpability than negligence), then these direct claims against the employer are not merely duplicative of the respondeat superior claims. Durben v. Am. Materials, 232 Ga. App. 750, 503 S.E.2d 618 (1998). In cases where a valid punitive damages claim would justify trying the negligent retention/supervision or entrustment claims as well as the respondeat superior claim, the Georgia courts have held the direct liability claims should be bifurcated to avoid any possible prejudice to the employer on the vicarious liability claim. Id.
Unfortunately, Georgia has a very complicated punitive damage statute. The punitive damage statute is found at O.C.G.A. § 51-12-5.1. This statute was amended in the late ‘80s in response to a tort reform movement and has been amended a couple of times since then. Under the terms of that statute, punitive damages are to be awarded only in tort actions where it is proven by “clear and convincing evidence" that the defendants’ actions showed “willful misconduct, malice, fraud, wantonness, oppression, or that entire want of care which would raise the presumption of conscious indifference to consequences.” Another section of that statute provides that the punitive damages are to be awarded not as compensation to a plaintiff but solely to “punish, penalize, or deter a defendant.”
By the terms of the statute, punitive damages in Georgia are capped at $250,000. O.C.G.A. §51-12-5.1. There are only three exceptions to capping: one for product liability cases, another for intentional act cases ("specific intent to cause harm"), and last for cases involving drugs or alcohol while driving a motor vehicle. If none of those three is involved in the facts of the case, then the $250,000 cap would apply. The punitive damage cap applies to each plaintiff separately, no matter how many defendants. Bagley v. Shortt, 261 Ga. 762, 410 S.E.2d 738 (1991).
Subsection (d) of that code section provides that the punitive damage case has to be bifurcated. The trier of fact is supposed is supposed to resolve first, whether an award of punitive damages should be made, and then, in the second phase of the case, the amount. Originally, the case law in Georgia allowed a trial judge the discretion to bifurcate the liability and punitive damage portions of the case to avoid prejudice to the defendants in the liability phase of the case. Moore v. Thompson, 255 Ga. App. 236, 336 S.E.2d 749 (1985) (a trucking case). However, the passage of the revised punitive damage statute as part of the Tort Reform Act in 1987 changed the standard. The statutory bifurcation scheme does not require bifurcation of the punitive damage aspects of the case from the liability aspects, thus adding potential prejudice in the liability phase of the case. The trial court is still vested with discretion to divide the case so as to avoid prejudice. Hanie v. Barnett, 213 Ga. App. 158, 444 S.E.2d 336 (1994). However, the trial court can no longer simply bifurcate the liability and punitive phases of the trial (as in the pre-tort reform days) Webster v. Boyett, 269 Ga. 191, 496 S.E.2d 459 (1998). Instead, the trial court is authorized to actually trifurcate the case (i.e., cut it into three parts).
Under the statutory scheme of bifurcation, the issue of whether to award punitive damages (thus requiring the jury to hear all of the harmful conduct), would actually come in during the compensatory damage phase of the case. Our courts have recognized that this punitive evidence might also inflame the jury on liability and compensatory damages and create unfairness to the defendant. For that reason, the courts have allowed, at the discretion of the trial judge, for trifurcation. Hanie v. Barnett, 213 Ga. App. 158, 444 S.E.2d 336 (1994); Webster v. Boyett, 269 Ga. 191, 496 S.E.2d 459 (1998); Moresi v. Evans, 257 Ga. App. 670, 572 S.E.2d 327 (2002); General Motors Corp. v. Mosely, 213 Ga. App. 875, 447 S.E.2d 302 (1994). In trifurcation, phase one of the trial would simply resolve fault, causation, and compensatory damages. Phase two would then consider whether or not the defendants’ actions were willful, wanton, or showed conscious indifference to consequences. In the event the jury decides that the defendant’s actions did constitute one of the grounds for punitive damages, then the amount of punitive damages would be awarded in the third and last phase. The decision about whether to trifurcate a punitive damage case is left entirely with the trial judge. For cases discussing these issues, see Smith v. Tommy Roberts Trucking Co., 209 Ga. App. 826 (1993); Bartja v. National Union Fire Ins. Co. of Pittsburgh, 218 Ga. App. 815 (1995); and especially Webster v. Boyett, 269 Ga. 191, 496 S.E.2d 459 (1998).
Evidence of financial circumstances is relevant in a punitive damage case. J.B. Hunt Transportation v. Bentley, 207 Ga. App. 250, 427 S.E.2d 499 (1993). However, a mere demand for punitive damages does not entitle the plaintiff to discovery on the defendant's financial circumstances. Instead, an evidentiary showing must be made. Holman v. Burgess, 199 Ga. App. 61, 404 S.E.2d 144 (1991); Ledee v. Devoe, 225 Ga. App. 620, 484 S.E2d 344 (1997). Prior similar incidents are admissible on punitive damages. Mack Trucks v. Conkle, 263 Ga. 539, 436 S.E.2d 635 (1993); Gunthorpe v. Daniels, 150 Ga.App. 113, 257 S.E.2d 199 (1979); cf, Holt v. Grinnell, 212 Ga. App. 520, 441 S.E.2d 874 (1994). In addition, even after discovery, a court can conclude that the evidence fails to meet the standard of clear and convincing as a matter of law. Durben v. Am. Materials, 232 Ga. App. 750, 503 S.E.2d 618 (1998); Frey v. Gainey Transp. Servs., 2006 U.S. Dist. LEXIS 90639 (N.D. Ga. 2006).
As noted above, in direct negligence cases, it is the conduct of the Employer that is considered in awarding punitive damages and not the actions of the employee. Clarke v. Cotton, 263 Ga. 861, 440 S.E,.2d 165 (1994). For cases considering punitive damages in trucking-direct negligence cases, see Smith v. Tommy Roberts Trucking Co., 209 Ga. App. 826 (1993); Meyer v. Trux Transp., Inc., 2006 U.S. Dist. LEXIS 81869 (N.D. Ga. 2006); Hutcherson v. Progressive Corp., 984 F.2d 1152 (11th Cir 1993); and Bartja v. National Union Fire Ins. Co. of Pittsburgh, 218 Ga. App. 815 (1995). In these cases, the Georgia courts have allowed the trial court discretion to bifurcate the direct negligence case so as to avoid prejudice the driver.
3. WRONGFUL DEATH AND PUNITIVE DAMAGES
A wrongful death claim is actually brought in two parts in Georgia. One is brought by the “statutory wrongful death claimant” and the other by the estate. Under the wrongful death statute, certain individuals are empowered to bring claims for wrongful death on behalf of a decedent. In the case of married adults, this right is placed in their spouse. Unmarried adults are represented by the children or parents. If no living relatives can be found, the estate will have the statutory death claim. The measure of damages in the statutory wrongful death claim is the “full value of the life of the decedent, unreduced by the expenses of living”. The “full value of the life” damages will include the economic component testified to by the plaintiff’s economists, and another amount equal to the “intangible” or “non-economic” aspects of life, which the jury is free to award in any amount according to their "enlightened conscience". Punitive damages are not allowed in statutory wrongful death claims. Ford Motor Co. v. Stubblefield, 171 Ga. App. 331, 319 S.E.2d 470 (1984).
The second portion of a wrongful death claim concerns the estate. The estate has any claim for medical and funeral expenses. In addition, in the event there is any sort of “survivor’s claim”, this would be the right of the estate to pursue. A survivor’s claim simply means that if a decedent dies with an existing personal injury claim, that claim can survive his or her death and be pursued by the estate. For example, if a claimant is injured and survives for some period of time before dying, then the injury claim and the claim for any pain and suffering incurred before death would be part of the survivor’s claim owned by the estate. This is separate and apart from the statutory wrongful death claim. Georgia also allows recovery for what are known as “pre-impact fright damages.” Pre-impact fright damages are awarded to a claimant to compensate them for their fright in realizing that they were about to have a possibly fatal accident. If there is clear evidence that the decedent was aware of the impending accident and would no doubt have been frightened to some degree, then the claim exists. This fright claim will survive death and is part of the estate claim. In appropriate circumstances, a punitive damage claim may also exist which relates to the survivorship claim. If so, and the decedent had a valid claim for punitive damages at the time of death, this claim, too, will survive death and will become a part of the estate claim. Donson Nursing Facilities, Inc. v. Dixson, 176 Ga. App. 700, 337 S.E.2d 351 (1985).
In summary, most plaintiffs seek:
(1) The full value of the life unreduced by the expenses of living (no punitive damages in statutory wrongful death claim); (2) Damages for funeral, burial and medical expenses (estate); (3) Pre-impact fright or survivorship of personal injury damages (estate) (4) Punitive damages, capped at $250,000 (estate only)
Illinois
Lew R.C. Bricker Smith Amundsen 150 North Michigan Ave., Suite 3300 Chicago, Illinois 60601 Tel: (312) 894-3200 Fax: (312) 894-3210 Email: [email protected]
A. Negligent Entrustment, Hiring, Retention and Supervision in Trucking Cases: Illinois
1. Respondeat Superior (Let the Master Answer)
a. What are the elements necessary to establish liability under a theory of Respondeat Superior?
To establish liability under this theory, two elements must exist. First, there must be a master-servant relationship and, second, the activity of the agent must be within the scope of the employment. Greene v. Rogers, 147 Ill. App. 3d 1009, 498 N.E.2d 867 (3rd Dist. 1986).
b. Examples and other Issues
In cases involving commercial transportation, a quasi form of respondeat superior, in the form vicariously liability, is almost always going to apply as Illinois recognizes what is commonly known as placard/logo liability. Essentially, a commercial motor carrier is going to be vicariously liable for an injury to the public at large where the motor carrier’s name and permit number are on a vehicle.
This vicarious liability stems primarily from the old I.C.C. and three Illinois cases. This case law was nicely summarized by the later of these three, Fulton v. Terra Cotta Truck Service, Inc., 266 Ill. App. 3d 609, 639 N.E.2d 1380 (1st Dist. 1994), which in citing the other two cases stated, “the Supreme Court held a trucking company vicariously liable for a driver’s negligence where that driver was operating the vehicle for his or her own use, but the trucking company’s name and permit number had not been removed from the vehicle or concealed pursuant to ICC regulations.” Fulton, at 613, citing, Schedler v. Rowley Interstate Transportation Co., Inc., 68 Ill. 2d 7, 368 N.E.2d 1287 (1977) and Kreider Truck Service, Inc., 76 Ill. 2d 535, 394 N.E.2d 1179 (1979).
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
A person may be liable for negligent entrustment of a vehicle where that person entrusts the vehicle to one whose incompetency, inexperience, or recklessness is known or should have been known by the entrustor of the vehicle. Rainey by & Through Rainey v. Pitera, 273 Ill. App. 3d 234, 237, 651 N.E.2d 747 (1st Dist. 1995) citing, Bishop v. Morich, 250 Ill. App. 3d 366, 369, 621 N.E.2d 43 (1st Dist. 1993); Johnson v. Ortiz, 244 Ill. App. 3d 384, 387, 614 N.E.2d 408 (1st Dist. 1993). Entrustment can be shown through the giving of express or implied permission. Rainey, 273 Ill. App. 3d at 237, citing Bishop, 250 Ill. App. 3d at
2 369; and Kosrow v. Acker, 188 Ill. App. 3d 778, 784, 544 N.E.2d 804 (2nd Dist. 1989).
Implied permission exists when a course of conduct or relationship between the parties includes a mutual acquiescence or lack of objection under circumstances signifying permission. Bishop, 250 Ill. App. 3d at 369; Johnson, 244 Ill. App. 3d at 387.
b. Examples and other Issues
In Pelczynski v. J.W. Peters & Sons, Inc., 178 Ill. App. 3d 882, 533 N.E.2d 1137 (2nd Dist. 1989), the defendant company had rented a car for an employee with a poor driving record. The defendant instructed the employee to use the car only for travel to his jobsite and not for personal business, but the employee had an accident while violating this directive. The trial court granted summary judgment in favor of the defendant, holding that the employee was acting outside the scope of his permission to use the car. The Second Appellate District reversed, stating, "Whether [the employee] was acting within the scope of defendant's consent is not an element of proof in a negligent entrustment case." Pelczynski, 178 Ill. App. 3d at 886. The Court held, that an entrustor is liable for permitting a poor driver to use the entrustor's vehicle notwithstanding any directions given to the incompetent driver.
Two cases cited by the Pelczynski court which involve negligent entrustment and respondeat superior are Neff v. Davenport Packing Co., 131 Ill. App. 2d 791, 268 N.E.2d 574 (3rd Dist. 1971) and Rosenberg v. Packerland Packing Co., (1977), 55 Ill. App. 3d 959, 370 N.E.2d 1235.1 In Neff, the court was presented with the issue of whether a defendant who admits liability under a respondeat superior theory can also be found liable under negligent entrustment. The court concluded that the defendant could not be held liable under negligent entrustment because "issues relating to negligent entrustment become irrelevant when the party so charged has admitted his responsibility for the conduct of the negligent actor." Neff, 131 Ill. App. 2d at 792, 268 N.E.2d at 575.
The Rosenberg case involved a question of whether defendant negligently entrusted a truck to a driver that it knew or should have known was mentally unstable. While the court held that the defendant could not be held liable under respondeat superior for the intentional infliction of emotional distress, the defendant could be liable for entrustment of the vehicle to an incompetent driver. Rosenberg, 55 Ill. App. 3d at 965, 370 N.E.2d at 1238-39.
Finally, the decision in Bates v. Doria, 150 Ill. App. 3d 1025, 502 N.E.2d 459 (2nd Dist. 1986), bears noting, for it held:
1 Neff, Rosenberg, and their progeny are cited in more detail in the Defenses section below.
3 Our supreme court long ago recognized that an employer's direct liability for negligent hiring and retention2 differs from his liability by way of respondeat superior and it has been held that the former action may be maintained even if the employee's conduct falls outside the scope of employment.
Bates, 150 Ill. App. 3d at 1031, 502 N.E.2d at 458-59.
3. Negligent Retention/Hiring
a. What are the elements necessary to establish liability under a theory of negligent retention/hiring?
An employer has a duty to refrain from hiring or retaining an employee who is a threat to third persons to whom the employee is exposed. Bates v. Doria, 150 Ill. App. 3d 1025, 502 N.E.2d 454 (2nd Dist. 1986), citing, Pascoe v. Meadowmoor Dairies (1963), 41 Ill. App. 2d 52, 56, 190 N.E.2d 156 (1st Dist. 1963). Such a cause of action arises in favor of a person who is injured as the proximate result of the employer's negligence in hiring or retaining the employee. Id.
An action for negligent hiring or retention of an employee requires the plaintiff to plead and proves (1) that the employer knew or should have known that the employee had a particular unfitness for the position so as to create a danger of harm to third persons; (2) that such particular unfitness was known or should have been known at the time of the employee's hiring or retention; and (3) that this particular unfitness proximately caused the plaintiff's injury. (emphasis added) Van Horne v. Muller, 185 Ill. 2d 299, 311, 705 N.E.2d 898 (1998), citing, Mueller v. Community Consolidated School District 54, 287 Ill. App. 3d 337, 341-42, 678 N.E.2d 660 (1st Dist. 1997) (emphasis added); Fallon v. Indian Trail School, Addison Township School District No. 4, 148 Ill. App. 3d 931, 935, 500 N.E.2d 101 (2nd Dist. 1986).
b. Examples and other Issues
An employer's direct liability for negligent hiring and retention is distinct from its respondeat superior liability for the acts of its employees. Van Horne, 185 Ill. 2d at 311, citing, Bates v. Doria, 150 Ill. App. 3d 1025, 1031, 502 N.E.2d 454 (2nd Dist. 1986). Under a theory of negligent hiring or retention, the proximate cause of the plaintiff's injury is the employer's negligence in hiring or retaining the employee, rather than the employee's wrongful act. Young v. Lemons, 266 Ill. App. 3d 49, 52, 639 N.E.2d 610 (1st Dist. 1994)
2 Please note, for purposes of these types of cases, Illinois Courts have found that the analysis for Negligent Entrustment, Negligent Hiring/Retention and Negligent Supervision is the same as to all three theories. See generally, Adolophous Gant v. L.U. Transport, Inc., 331 Ill. App. 3d 924, 770 N.E.2d 1155 (1st Dist. 2002).
4 To withstand a defendant’s motion for summary judgment, plaintiffs are required to show that any negligence by the defendants in hiring or retaining the employee was the proximate cause of his/her injuries. Bates v. Doria, 150 Ill. App. 3d 1025, 502 N.E.2d 454 (2nd Dist. 1986).
4. Negligent Supervision
An action for negligent supervision of an employee requires the plaintiff to plead and prove that: (1) an employer had a duty to supervise its employees, (2) the employer negligently supervised an employee, and (3) such negligence proximately caused the plaintiff's injuries. Mueller v. Community Consolidated School District 54, 287 Ill. App. 3d 347, 342-43, 678 N.E.2d 660 (1st Dist. 1997), citing, Niven v. Siqueira, 109 Ill. 2d 357, 361, 487 N.E.2d 937 (1985) (plaintiff alleged hospital negligent in supervision of physician); State Farm Fire & Casualty Co. v. Mann, 172 Ill. App. 3d 86, 92, 526 N.E.2d 389, (1st Dist. 1988) (plaintiff alleged parent negligent in supervision of child); Normoyle-Berg & Associates, Inc. v. Village of Deer Creek, 39 Ill. App. 3d 744, 744-45, 350 N.E.2d 559, (3rd Dist. 1976) (plaintiff alleged engineer negligent in supervision of construction project).
B. Defenses
1. Admission of Agency/Admitting Liability Under Respondeat Superior
As addressed briefly above, an employer's liability under a respondeat superior theory for the acts of its employees is distinct from its liability for negligent hiring, retention or entrustment. Adolophous Gant v. L.U. Transport, Inc., 331 Ill.App.3d 924, 770 N.E.2d 1155 (1st Dist. 2002), citing, Montgomery v. Petty Management Corp., 323 Ill. App. 3d 514, 519, 752 N.E.2d 596 (1st Dist. 2001). A negligence claim brought under a respondeat superior theory is based upon an employer's vicarious liability for the wrongful acts of its employees. By contrast, a negligence claim brought under a theory of negligent hiring or retention is based upon the employer's negligence in hiring or retaining the employee, rather than the employee's wrongful act. Van Horne v. Muller, 185 Ill. 2d 299, 311, 705 N.E.2d 898, 905, 235 Ill. Dec. 715 (1998).
2. The Effect of Illinois’ Adoption of Comparative Negligence
In light of Illinois’ adoption of comparative negligence, the Gant Court revisited the questions first addressed in Neff whether negligent entrustment, hiring or supervision claims should be allowed when the employer has admitted vicarious liability via respondeat superior.
In Gant, the trial court determined that the count based on negligent hiring, retention and entrustment could not stand under the holdings of the court in
5 Ledesma v. Cannonball, Inc., 182 Ill. App. 3d 718, 538 N.E.2d 655 (1st Dist. 1989), and Neff v. Davenport Packing Co., 131 Ill. App. 2d 791, 268 N.E.2d 574 (3rd Dist. 1971). Gant argued that Ledesma and Neff are no longer applicable in view of the adoption of comparative negligence by the Illinois Supreme Court in Alvis v. Ribar, 85 Ill. 2d 1, 421 N.E.2d 886 (1981).
Although the Ledesma court did not address the issue of the applicability of the Neff holding in a comparative negligence jurisdiction, the Gant Court reaffirmed Ledesma and found that Neff was still applicable. Notwithstanding the fact that Illinois is a comparative negligence jurisdiction, a plaintiff who is injured in a motor vehicle accident cannot maintain a claim for negligent hiring, negligent retention or negligent entrustment against an employer where the employer admits responsibility for the conduct of the employee under a respondeat superior theory. Gant, 331 Ill. App. 3d at 928.
3. The Rationale Behind Gant and Respondeat Superior v. Negligent Entrustment in Illinois
The Gant Court then provided an in-depth explanation for the rationale behind its ruling and respondeat superior vs. negligent entrustment in Illinois. In a motor vehicle accident, comparative fault as it applies to the plaintiff should end with the parties to the accident. Gant, 331 Ill. App. 3d at 928. A plaintiff's comparative negligence remains the same, regardless of whether the remaining fault can be allocated in part to the employer based on negligent entrustment. Id. Although negligent entrustment may establish independent fault on the part of the employer, it should not impose additional liability on the employer. Id. The employer's liability under negligent entrustment, because it is predicated initially on, and therefore is entirely derivative of, the negligence of the employee, cannot exceed the liability of the employee. Id. Regardless of whether the employer is actually guilty of the separate tort of negligent entrustment, the employer who concedes responsibility under the theory of respondeat superior is strictly liable for the employee's negligence. Id. The employer is thus responsible for all the fault attributed to the negligent employee, but only the fault attributed to the negligent employee as compared to the other parties to the accident. Gant, 331 Ill. App. 3d at 929.
The doctrine of respondeat superior and the doctrine of negligent entrustment are simply alternative theories by which to impute an employee's negligence to an employer. Gant, 331 Ill. App. 3d at 929. Under either theory, the liability of the principal is dependent on the negligence of the agent. Id. If it is not disputed that the employee's negligence is to be imputed to the employer, there is no need to prove that the employer is liable. Id. Once the principal has admitted its liability under a respondeat superior theory, such as in the instant case, the cause of action for negligent entrustment is duplicative and unnecessary. Id. To allow both causes of action to stand would allow a jury to assess or apportion a principal's liability twice. Gant, 331 Ill. App. 3d at 929-930. The fault of one party cannot be
6 assessed twice, regardless of the adoption of comparative negligence. Gant, 331 Ill. App. 3d at 930.
4. Willful and Wanton Negligence and Respondeat Superior
As is noted below in the Punitive Damages section, when a plaintiff is allowed to plead punitive damages, a willful and wanton negligent entrustment count will be allowed even though the employer admits responsibility under respondeat superior.
The Gant Court distinguished the application of negligent entrustment when willful and wanton negligence is alleged. The court did not believe that the Illinois Supreme Court's decision in Lockett v. Bi-State Transit Authority, 94 Ill. 2d 66, 445 N.E.2d 310, 67 Ill. Dec. 830 (1983) (see below) stood for the proposition that the adoption of comparative negligence rendered Neff no longer viable. Instead, the Lockett court held that Neff's rationale does not apply when the entrustment alleged is willful and wanton. Gant, 331 Ill.App.3d at 930.
C. Punitive Damages
It should be noted, under Illinois law, pursuant to 735 ILCS 5/2-604.1, no complaint based upon bodily injury shall contain a prayer for punitive damages. Under the statute, a plaintiff may move for a pretrial hearing and seek leave to amend the complaint to include a prayer for punitive damages no later than 30 days after the close of discovery. Masciola v. Chicago Metro Ski Council, 257 Ill. App. 3d 313, 315, 628 N.E.2d 1067 (1st Dist. 1993).
1. Is Evidence Supporting a Derivative Negligence Claim Permissible to Prove an Assertion of Punitive Damages?
Evidence supporting a derivative negligence claim is permissible to prove an assertion of punitive damages. In Lockett v. Bi-State Transit Authority, 94 Ill. 2d 66, 445 N.E.2d 310 (1983), the Illinois Supreme Court held that in cases involving willful and wanton entrustment, the analysis necessarily differs from that of negligent entrustment. Unlike the situation in negligent-entrustment cases, where the misconduct of the defendant-principal is of the same level of culpability as that of the tortfeasor-agent, defendants-principals may be found guilty of willful and wanton misconduct even though the tortfeasors-agents to whom the instrumentality causing the injury was entrusted may have been only negligent. Furthermore, while contributory negligence by the plaintiffs would, prior to Alvis v. Ribar, 85 Ill. 2d 1, 421 N.E.2d 886 (1981), bar recovery in actions for negligent entrustment, it would not preclude recovery when the defendants were guilty of willful and wanton misconduct. Consequently, the necessity of proof of the defendant-principal's misconduct in connection with willful-and-wanton- entrustment actions is not eliminated simply because that party acknowledges an agency relationship with the tortfeasor.
7
Indiana
Phil L. Isenbarger Bingham McHale, LLP 2700 Market Tower 10 West Market Street Indianapolis, IN 46204 Tel: (317) 635-8900 Fax: (317) 968-5493 E-mail: [email protected]
1 A. Elements of Proof for the Derivative Claims of Negligent Entrustment, Hiring/Retention and Supervision Under Indiana Law
1. Respondeat Superior (Let the master answer)
a. What are the elements necessary to establish liability under a theory of Respondeat Superior in Indiana?1
A principal or employer is liable for the tortious acts of its agent or employee when the agent’s tortious acts were done within the course and scope of the employment. Clark v. Millikin Mortg. Co, 495 N.E.2d 544 (Ind. Ct. App. 1986); Estate of Mathes v. Ireland, 419 N.E.2d 782, 786 (Ind. Ct. App. 1981).
Indiana does not recognize the doctrine of placard liability. “The mere fact that [defendant’s] name was displayed on the side of the vehicle is wholly insufficient to support any reasonable inference that the driver, whoever it may have been, was an agent or employee of [defendant] and that he was acting within the scope of his employment.” State v. Halladay, 374 N.E.2d 51, 53 (Ind. Ct. App 1978) (citing Pace v. Couture, 276 N.E.2d 218 (Ind. Ct. App. 1971).
The actions of an independent contractor can result in liability only if the court or jury determines that an employee-employer relationship exists. The biggest factor in this determination is the existence of a mutual belief that an employee-employer relationship exists. Kahrs v. Conley, 729 N.E.2d 191, 194 (Ind. Ct. App. 2000).
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment in Indiana?
Generally, when a person ceases to control an instrumentality, liability does not attach to that person for injuries inflicted by it. Johnson v. Patterson, 570 N.E.2d 93, 96 (Ind. Ct. App. 1991). However, “An exception exists where the instrument is entrusted to one who is incompetent or irresponsible or who lacks the capacity to safely use or operate the instrumentality.” Id. Liability under a theory of negligent entrustment requires proof of: “1) an entrustment, 2) to an incapacitated person or one who is incapable of using due care, 3) with actual and specific knowledge that the person is incapacitated or incapable of using due care at the time of the entrustment, 4) proximate cause, and 5) damage.” Estate of Heck ex rel. Heck v. Stoffer, 752 N.E.2d 192, 200 (Ind. Ct. App. 2001) (quoting Johnson v. Patterson at 97); see also Straley v. Kimberly, 687 N.E.2d 360 (Ind. Ct. App. 1997).
1 It is important to note that Indiana law may be preempted in many cases by Federal Motor Carrier Safety Administration regulations. This is especially likely if the truck is involved in interstate commerce. 2 3. Negligent Hiring/Retention
a. What are the elements necessary to establish liability under a theory of negligent entrustment in Indiana?
Indiana recognizes both negligent hiring and negligent retention as the same tort. See Levinson v. Citizens Nat. Bank of Evansville, 644 N.E.2d 1264, 1269 (Ind. Ct. App. 1994). An employer will be liable for the tort of negligent hiring and retention if the employer failed to exercise reasonable care. Konkle v. Henson, 672 N.E.2d 450, 454 -55 (Ind. Ct. App. 1996) (citing Frye v. American Painting, 642 N.E.2d 995, 998 (Ind. Ct. App. 1994)). Indiana Courts determine the standard of reasonable care in hiring and retention according to the Restatement (Second) of Torts § 317 as the standard for this tort. Id. Section 317 states:
A master is under a duty to exercise reasonable care to control his servant while acting outside the scope of his employment as to prevent him from intentionally harming others or from so conducting himself as to create an unreasonable risk of bodily harm to them, if (a) the servant (I) is upon the premises in possession of the master or upon which the servant is privileged to enter only as his servant, or (ii) is using a chattel of the master, and (b) the master (I) knows or has reason to know that he has the ability to control his servant, and (ii) knows or should know of the necessity and opportunity for exercising such control.
Furthermore, the commentary to § 317 states that “the master may subject himself to liability under the rule stated in this Section by retaining in his employment servants who, to his knowledge, are in the habit of misconducting themselves in a manner dangerous to others.” Restatement (Second) of Torts, § 317, Comment (quoted by the Indiana Court of Appeals in Konkle).
b. A Caveat
Furthermore, if it is determined that the employee was acting within the scope of employment when a tort was committed, liability cannot be predicated on the theory of negligent hiring or negligent retention. “Although Indiana law recognizes a separate cause of action for the negligent hiring of an employee, that theory is of no value where an employer has stipulated that his employee was within the scope of his employment. The doctrine of respondeat superior provides the proper vehicle for a direct action aimed at recovering the damages resulting from a specific act of negligence committed by an employee within the scope of his employment.” Tindall v. Enderle, 320 N.E.2d 764, 768 (Ind. Ct. App.
3 1974). See also Shipley v. City of South Bend, 372 N.E.2d 490, 493 (Ind. Ct. App. 1978).
4. Negligent Supervision
a. What are the elements necessary to establish liability under a theory of negligent supervision in Indiana?
Liability for negligent supervision requires that a special relationship exists between the defendant and the party whose behavior ought to have been controlled. Estate of Heck ex rel. Heck v. Stoffer 752 N.E.2d 192, 203 (Ind. Ct. App. 2001). This relationship exists where “There is a dependency, that is, a person in need of special supervision or protection from someone who is in a superior position to provide it.” Id. Indiana Courts generally follow the Restatement (Second) of Torts to determine whether a relationship at question creates a duty to control a third person to prevent the third person from causing physical harm to another. Id.; See also Bowling v. Popp, 536 N.E.2d 511, 515 (Ind. Ct. App. 1989). The restatement dictates that a master has an affirmative duty to control the conduct of his servants. Id.
B. Defenses
1. Admission of Agency
If an employer admits or stipulates the agency relationship between itself and the employee thus admitting to liability under a theory of respondeat superior, it is likely that no other theory of negligence will be accepted by Indiana Courts. “The doctrine of respondeat superior provides the proper vehicle for a direct action aimed at recovering the damages resulting from a specific act of negligence committed by an employee within the scope of his employment.” Tindall v. Enderle, 320 N.E.2d 764, 768 (Ind. Ct. App. 1974).
2. Traditional Tort Defenses
Depending on the facts of a specific case, traditional tort defenses, such as comparative fault, failure to mitigate damages, superseding and intervening cause, etc. may apply.
C. Punitive Damages
1. Is evidence supporting a derivative negligence claim permissible to prove an assertion of punitive damages?
In Indiana, the right to punitive damages requires more than proof that a tort was committed. Williams v. Younginer, 851 N.E.2d 351, 358 (Ind. Ct. App. 2006) (citing Erie Ins. Co. v. Hickman by Smith, 622 N.E.2d 515, 4 520 (Ind. 1993)). “Punitive damages may be awarded only if there is clear and convincing evidence that defendant ‘acted with malice, fraud, gross negligence, or oppressiveness which was not the result of a mistake of fact or law, honest error or judgment, overzealousness, mere negligence, or other human failing.’” Id. (citing Erie Ins. Co v. Hickman).
Since an award of punitive damages requires more than proof by a preponderance of the evidence that a tort occurred, the trial court can determine as a threshold matter whether the jury should even consider a claim for punitive damages and enter a judgment on such a claim. Id.; see also Plohg v. NN Investors Life Ins. Co., Inc., 583 N.E.2d 1233 (Ind. Ct. App. 1992).
Indiana Code § 34-51-3-4 limits the amount of punitive damages that may be awarded to three (3) times the amount of compensatory damages or fifty thousand dollars ($50,000), whichever is greater. Further, plaintiffs are discouraged from seeking punitive damages because Indiana law requires that seventy-five per cent (75%) of the punitive damages awarded be put into the state’s violent crime victim compensation fund. The plaintiff receives only twenty-five per cent (25%) of the punitive damages award. Ind. Code § 34-51-3-6.
5
Iowa
Mark J. Herzberger Sasha L. Monthei Moyer & Bergman, P.L.C. 2720 1st Avenue NE P.O. Box 1943 Cedar Rapids, IA 52406 Tel: (319) 366-7331 Fax: (319) 366-3668 Email: [email protected] [email protected]
A. Liability of Employer for Negligence involving Employees.
In Iowa, there are several theories by which an employer might be held liable for negligence involving its employees. Some of the claims are derivative, which means that liability can only be imposed on the employer if the employee is found to be at fault for causing injury to a third party, and some are direct, which imposes liability on the employer for its own acts, and does not depend on whether the employee is found at fault.
1. Respondeat Superior
In Iowa, under the doctrine of respondeat superior, an employer is liable for the negligence of an employee committed while the employee is acting within the scope of his or her employment. Jones v. Blair, 387 N.W.2d 349, 355 (Iowa 1986); Sandman v. Hagan, 261 Iowa 560, 566, 154 N.W.2d 113, 117 (1967). A claim of vicarious liability under the doctrine of respondeat superior rests on two elements, 1) proof of an employer/employee relationship, and 2) proof that the injury occurred within the scope of that employment. Biddle v. Satori Mem’l Hosp., 518 N.W.2d 795, 797 (Iowa 1994). For an act to be within the scope of employment the conduct complained of “must be of the same general nature as that authorized or incidental to the conduct authorized.” Sandman, 261 Iowa at 567, 154 N.W.2d at 117. Thus, an act is deemed to be within the scope of one's employment “where such act is necessary to accomplish the purpose of the employment and is intended for such purpose.” Id.
2. Iowa Code section 321.493(1).
Iowa Code section 321.493(1) provides:
In all cases where damage is done by any motor vehicle by reason of negligence of the driver, and driven with consent of the owner, the owner of the motor vehicle shall be liable for such damage. For purposes of this subsection, “owner” means the person to whom the certificate of origin for the vehicle has been issued or assigned or to whom a manufacturer’s or importer’s certificate of origin for the vehicle has been delivered or assigned. However, if the vehicle is leased, “owner” means the person to whom the vehicle is leased not the person to whom the certificate of title for the vehicle has been issued or assigned or to whom the manufacturer’s or importer’s certificate of origin for the vehicle has been delivered or assigned. For purposes of this subsection, “leased” means the transfer of the possession or right to possession of a vehicle to a lessee for a valuable consideration for a continuous period of twelve months or more, pursuant to a written agreement.
Under this statute a lessee motor carrier is liable for the negligent acts of its driver. The purpose of the statute is to protect an innocent third party from the careless operation of a motor vehicle and to make the owner responsible for the negligence of one to whom the owner entrusted its operation. Briner v. Hyslop, 337 N.W.2d 858 (Iowa 1983).
3. Negligent Entrustment.
Iowa courts have recognized a cause of action for negligent entrustment in a variety of circumstances. However, because of section 321.493(1), which imposes liability on owners without a showing of negligence on the part of the owner in entrusting the vehicle to another, this theory of recovery has been virtually extinguished in transportation cases since the liability is automatic pursuant to the statute.
4. Negligent Hiring.
The following elements must be proven to sustain a cause of action for negligent hiring:
(1) that the employer knew, or in the exercise of ordinary care should have known, of its employee’s unfitness at the time of hiring;
(2) that through the negligent hiring of the employee, the employee’s incompetence, unfitness or dangerous characteristics proximately caused the resulting injuries; and
(3) that there is some employment or agency relationship between the tortfeasor and the defendant employer.
Godar v. Edwards, 588 N.W.2d 701, 708-09 (Iowa 1999). Relevant inquiries with respect to a negligent hiring claim include what the employer knew about the individual at the time of hiring, what pre-employment investigations the employer performed, whether the employer followed its usual pre-employment procedure, how do the employer’s pre-employment procedure compare to efforts made by other similar employers, and the specifics of the employer’s policy or procedure in making new hires. See Wilson v. Darr, 553 N.W.2d 579, 584 (Iowa 1996).
5. Negligent Retention, Supervision or Training.
In order to establish a cause of action for negligent retention, supervision or training, the plaintiff must prove that :
(1) the employer knew, or in the exercise of ordinary care should have known, of its employee’s unfitness at the time the employee engaged in wrongful or tortuous conduct;
(2) through the negligent supervision of the employee, the negligent employee’s incompetence, unfitness or dangerous characteristics proximately caused injuries to the plaintiff; and
(3) there is some employment or agency relationship between the employee and the defendant employer.
Estate of Harris v. Papa John’s Pizza, 679 N.W.2d 673 (Iowa 2004). A claim of negligent supervision also must include an element of underlying tort or wrongful act committed by the employee. Cubit v. Mahaska County, 677 N.W.2d 777 (Iowa 2004) (in action by state trooper against county, alleging county negligently failed to train dispatcher with information that driver fleeing from law enforcement officers intended to crash vehicles into officers, negligent supervision claim arose out of act or omission in connection with emergency response so as to fall within scope of statutory immunity provided to county).
6. Defenses.
a.. Admission of Agency
Iowa courts have not adopted the majority view that once an employer has admitted the agency relationship between it and the employee for purposes of being held liable under a vicarious liability theory, that it is improper to allow a plaintiff to proceed against the employer on any other theory of derivative or dependent liability. According to Iowa courts, a plaintiff should be able to submit alternative claims of liability to the jury. Thrasher v. Gerken, 309 N.W.2d 488 (Iowa 1981).
b. Traditional Tort Defenses.
Depending on the facts of a particular case, traditional tort defenses such as comparative fault, failure to mitigate damages, superseding and intervening cause, and other similar defenses may be available to the employer.
C. Punitive Damages.
In Iowa, punitive damages are recoverable only upon a showing that "by a preponderance of clear, convincing, and satisfactory evidence" the defendant's conduct constituted "willful and wanton disregard" for the rights and safety of the plaintiff. Iowa Code § 668A.1(1). Conduct is "willful and wanton" if "the actor has intentionally done an act of an unreasonable character in disregard of a known or obvious risk that was so great as to make it highly probable that harm would follow, and which thus is usually accompanied by a conscious indifference to the consequences." Fell v. Kewanee Farm Equip. Co., a Div. of Allied Prods., 457 N.W.2d 911, 919 (Iowa 1990). Merely objectionable conduct will not suffice to meet the procedural requirements of section 668A.1, rather, the plaintiff must be able to offer evidence that the defendant engaged in a persistent course of conduct to show that the defendant acted with no care and with no regard for the consequences of those acts. See McClure v. Walgreens Co., 613 N.W.2d 225 (Iowa 2000).
Employers could be liable for punitive damages involving the actions of its employees in some cases. In Briner v. Hyslop, 337 N.W.2d 858 (Iowa 1983), the Iowa Supreme Court held that an employer may be held liable for punitive damages for the reckless employment or retention of an employee, the ratification or approval of outrageous acts by its employees, or for outrageous acts performed by an employee in a managerial capacity. In Seraji v. Perket, 452 N.W.2d 399, 402 (Iowa 1990), a negligent hiring case, the Iowa Supreme Court held the following evidence was not enough to meet the standard required for an award of punitive damages: the employees driving record was not good, the company learned that the employee’s license had been revoked on at least one occasion, that the employee had been convicted of speeding on at least four occasions, and that the employee was also convicted of driving without a license. The Court held that the employer’s conduct did not amount to the type of reckless disregard required for an award of punitive damages.
D. Logo / Placard Liability
Iowa courts have not directly addressed the issue of placard liability. However, the U.S. District Court for the Northern District of Iowa, in Lyons v. Anderson, 123 F.Supp.2d 485 (N.D. Iowa 2000), construing Iowa law, held that under the ICC regulations, the carrier/lessee has full and complete responsibility during the term of the lease. As such, the driver/lessor becomes, for liability purposes, the employee of the carrier. The Court also cited Iowa Code section 321.493(1), which is set forth above, and held that the Iowa statute and the ICC regulations are in “complete harmony”, and therefore the lessee motor carrier is liable for any negligence the jury attributes to the owner/lessor. The Court stated that liability under this statute and the ICC regulations is not governed by the existence or non-existence of a placard on the vehicle.
Kansas
Robert P. Numrich Todd M. Johnson Baty, Holm & Numrich, P.C. 210 Plaza West Building 4600 Madison Avenue Kansas City, Missouri 64112 Tel: (816) 531-7200 Fax: (816) 531-7201 Email: [email protected] Email: [email protected]
A. Kansas recognizes four separate theories of recovery against an employer/principal for an injury caused to a third party by an employee/agent/contractor:
(1) Respondent superior; (2) Negligent entrustment; (3) Negligent hiring or retention; and (4) Negligent training or supervision.
B. Under Kansas law an admission by the defendant that an employee/agent was acting within the course and scope of his employment/agency when the employee negligently caused injury to another does not preclude a separate claim against the employer/principal for negligent entrustment or negligent hiring, training, retention or supervision. Marquis v. State Farm Fire & Casualty Co., 265 Kan. 317, 961 P.2d 12, 13 (1998), Patterson v. Dahlston Truck Line, Inc., et al., 130 F. Supp. 2nd 1228 (D. Kan. 2000). These torts are distinct from respondent superior as they are not derivative of the employee’s negligence. Patterson at 1228. These claims are not imputed but run directly from the employer to the person injured. Absent a specific exclusion for these claims, the CGL policy may provide coverage for these separate claims. Crist v. Hunan Palace, Inc., 277 Kan. 706, 89 P.3d 763 (2004), (holding general auto exclusion in the CGL policy did not exclude coverage for negligent supervision or training).
Negligent supervision is a separate and distinct theory from negligent hiring and retention. It includes not only the failure to supervise, but also includes the failure to control persons with whom the defendant has a special relationship including defendant’s employees or other persons. Kansas State Bank & Trust Co. v. Specialized Transportation Services, Inc., 249 Kan. 348, 819 P.2d 587 (1981).
Likewise, negligent supervision or control and negligent hiring or retention of employees are separate and distinct from the theory of negligent entrustment which occurs when an owner of an automobile allows a third party to drive it while knowing the third-party driver to be incompetent, careless or reckless. McCart & Muir, 230 Kan. 618, 641 P.2d 384 (1982).
C. Kansas follows the general rule that an employer of an independent contractor is not liable for injuries caused by the negligence of an independent contractor. However, there are various exceptions to that rule, including the negligence of an employer in selecting, instructing or supervising the contractor including Restatement (Second) of Torts § 411, which states:
An employer is subject to liability for physical harm to third persons caused by his failure to employ a competent and careful contractor
(a) to do work which will involve a risk of physical harm unless it is skillfully and carefully done, or (b) to perform any duty which the employer owes to third person.
See generally Dye v. WMC, Inc., 172 P.3rd 49 (Kan. App. 2007) (holding parents and husband stated valid claims for relief against center based on its negligent hiring of an aviation company, an independent contractor, to perform air ambulance service).
D. Traditional comparative fault defenses are available to each of the above theories. Comparative fault can be assessed against both parties and non-parties. There is no joint and several liability. A defendant is responsible only for the percentage of fault assessed against it. K.S.A. §60-258(a).
E. There is a cap for non-pecuniary/compensation damages of $250,000. The jury is not told of the cap. Awards exceeding $250,000 of non-pecuniary damages will first be reduced by comparative fault assessed against the plaintiff in or plaintiff’s decedent before being capped at $250,000. K.S.A. §60-19(a)(01), §60-19(a)(02).
F. Punitive damages are addressed by K.S.A. §60-3702 and §60-3703. In Kansas State Court lawsuits, a claim for punitive damages cannot be included in the original petition. The court must issue an order allowing the claim for punitive damages to be added on the basis of supporting and opposing affidavits which establish that there is a probability that plaintiff will prevail on the claim. The United States District Court in Kansas follows federal procedural rules and allows the original Complaint to state a claim for punitive damages.
Punitive damages (in both state and federal court) are determined by the court in a separate (second) proceeding and must be based on clear and convincing evidence of willful conduct, wanton conduct, fraud or malice proved by the plaintiff in the initial proceeding. In that initial proceeding the trier of fact will only determine if punitive damages are warranted. The amount of punitive damages is capped at $5,000,000, except in cases where the profitability of the defendant’s misconduct exceeds $5,000,000. In those cases the court may award 1 ½ times the amount of profit which the defendant gained.
Kentucky
D. Craig Dance Greenebaum Doll & McDonald PLLC 300 West Vine Street Suite 1100 Lexington, Kentucky 40507-1622 Tel: (859) 288-4604 Fax: (859) 367-3819 E-mail: [email protected]
A. ELEMENTS OF PROOF
1. Negligent Hiring, Retention, and Supervision
The concepts of negligent hiring, retention, and supervision are fairly recent additions to Kentucky jurisprudence. The Kentucky Court of Appeals first acknowledged a claim for negligent hiring and retention in Oakley v. Flor-Shin, Inc., 964 S.W.2d 438, 442 (Ky. App. 1998) based upon the Restatement (Second) of Agency § 213 (1958). “An employer can be held liable when its failure to exercise ordinary care in hiring or retaining an employee creates a foreseeable risk of harm to a third person.” Courts evaluate whether the employer knew, or reasonably should have known, that (1) the employee in question was unfit for the job for which he or she was employed, and (2) the employee’s “placement or retention in that job created an unreasonable risk of harm” to a third party.”
The analysis would naturally alter depending on whether the claim was based on negligent hiring or negligent retention. The Kentucky Court of Appeals, in an unpublished decision, clarified the standard based on that distinction: “A claim for negligent hiring arises when an employer negligently places a person with known propensities, or propensities which should have been discovered by reasonable investigation, in an employment position in which it should have been foreseeable that the individual posed a threat of injury to others. Negligent retention requires that the employer be aware, or should have been aware, that an employee poses a threat and fails to take remedies measures to ensure the safety of others.” Airdrie Stud, Inc. v. Reed, Nos. 2001-CA-001397-MR et al., 2003 WL 22796469 (Ky. App. Nov. 26, 2003).
The Kentucky courts have also acknowledged that “negligent supervision” is available under the Oakley test, albeit with another set of slight modifications to the phrasing of the rule. “To sustain a claim for negligent supervision, the claimant must show that (1) the employer knew or should have known that the employees were unfit for the job, and (2) the employer’s alleged failure to properly supervise the employees created an unreasonable risk of harm to the claimant.” Jones v. Lexington H-L Services, Inc., No. 2003-CA-002072-MR, 2004 WL 2914880 at *4 (Ky. App. Dec. 17, 2004).
All three claims (hiring, retention, and supervision) are now widely recognized and applied by Kentucky courts.
An employer may also be liable for negligent hiring, retention or supervision based on a failure to train or retrain an employee correctly. See Pennington v. Dollar Tree Stores, Inc., 28 Fed. Appx. 482, 490 (6th Cir. 2002); Taylor v. O’Neil, Nos. 2005- CA-001301-MR et al., 2007 WL 2069590 at *7(Ky. App. July 20, 2007).
The following are examples of negligent hiring, retention, or supervision cases pursued under Kentucky law. Oakley v. Flor-Shin, Inc., 964 S.W.2d 438 (Ky. App. 1998); Stalbosky v. Belew, 205 F.3d 890 (6th Cir. 2000); Estate of Presley v. CCS of Conway, No. 3:03CV-117-H, 2204 WL 1179448 (W.D. Ky. May 18, 2004); Dortsch v. Fowler, No. 3:05-CV-216-JDM, 2007 WL 1297122 (W.D. Ky. May 1, 2007); and
Olinger v. Corp. of the President of the Church of Jesus Christ of Latter-Day Saints, No. 5:07-29-JMH, 2007 WL 3244714 (E.D. Ky. Oct. 31, 2007).
2. Negligent Entrustment
Kentucky has adopted the common law theory of negligent entrustment regarding automobiles. Owensboro Undertaking & Livery Ass’n v. Henderson, 115 S.W.2d 563 (Ky. 1938). The owner of automobile is liable when he entrusts the vehicle to another whom he knows to be inexperienced, careless, or reckless, or given to excessive use of intoxicating liquor while driving. McGrew v. Stone, 998 S.W.2d 5, 8 (Ky. 1999)(Cooper, J., dissenting); Higgans v. Deskins, 263 S.W.2d 108, 111 (Ky. 1953). The owner of an automobile is generally not liable when the person to whom the owner entrusts the vehicle makes a subsequent entrustment without the owner’s knowledge. McGrew, 998 S.W.2d at 8 (citing Knoles v. Salazar, 766 S.W.2d 613 (Ark. 1989). The owner is potentially liable, however, if the owner knew or should have known at the time of the original entrustment that a subsequent entrustment would be made and that the subsequent driver was “inexperienced, incompetent, or reckless….” McGrew, 998 S.W.2d at 8 (Cooper, J., dissenting). Liability may be found if the vehicle was left unlocked, with the keys inside, on public property. See Bruck v. Thompson, 131 S.W.3d 764 (Ky. App. 2004); KRS 189.430(3).
3. Related Claim – Vicarious Liability
“To hold an employer vicariously liable for the actions of an employee, the doctrine of respondeat superior requires a showing that the employee’s actions were in the course and scope of his employment and in furtherance of the employer’s business.” Easterling v. Man-O-War Automotive, Inc., 223 S.W.3d 852, 855 (Ky. App. 2007). “Scope of employment” in the context of an employee’s intentional tort is guided by the requirement that the employee act “in furtherance of the employer’s business.” The motive of the employee in acting, whether it is for his own personal interests or for his employer’s, is what defines the scope of employment. Osborne v. Payne, 31 S.W.3d 911 (Ky. 2000) – Priest who had an affair with the wife of a husband while serving as their marriage counselor was not acting within his scope of employment with the church; motive for the affair was obviously personal. Frederick v. Collins, 378 S.W.2d 617 (Ky. 1964) – Employee of a grocery store who shot a man pretending to rob the store was acting within the scope of employment; employee would have had no personal motive for shooting the man. See also, Wood v. Southeastern Greyhound Lines, 194 S.W.2d 81 (Ky. 1946); Patterson v. Blair, 172 S.W.3d 361 (Ky. 2005); and Olinger v. Corp. of the President of the Church of Jesus Christ of Latter-Day Saints, No. 5:07-29-JMH, 2007 WL 3244714 (E.D. Ky. Oct. 31, 2007).
“Scope of employment” in the context of an employee’s negligence is guided by an analysis of the employee’s actions at the time of the incident and the authority bestowed upon the agent by the principal. If the agent is performing actions within his “scope of employment” as defined by his authority, then the employer is vicarious liable for those actions. Weldon v. Federal Chemical Co., 378 S.W.2d 633 (Ky. 1964) – a sales manager was granted authority to use a company vehicle both for company business and
“private pleasure.” Defendant company was not liable for accident that occurred when sales manager was on the way to pick up his son, an action unrelated to company business. Oppenheimer v. Smith, 512 S.W.2d 510 (Ky. 1974) – Restaurant allowed employees to use a company automobile for transportation to and from a softball game. The game was not sponsored by the restaurant. Restaurant was not vicariously liable for accident that occurred while employee was driving back from the softball game. See also, Easterling v. Man-O-War Automotive, Inc., 223 S.W.3d 852 (Ky. App. 2007); Estell v. Barrickman, 571 S.W.2d 650 (Ky. App. 1978);
B. DEFENSE CONSIDERATIONS
Kentucky courts have not yet had the opportunity to clarify much of the law surrounding negligent hiring, retention, supervision, and entrustment. This includes the potential defenses that defendant-employers have available to them. Notwithstanding, there are several points that can be made regarding defenses of these torts.
1. Common tort defenses.
Kentucky would likely recognize most, if not all, common law tort defenses in negligent hiring, retention, and supervision cases, e.g., pure comparative fault.
2. Admission of Agency – Impact of Employer Acknowledgment of the Agency Relationship.
Most jurisdictions considering the issue have found that an admission of an agency relationship between the employer and employee obviates the need for claims of negligent hiring, retention, or supervision; instead, such claims are subsumed into the claim for vicarious liability. See e.g., Durben v. American Materials, Inc., 503 S.E.2d 618, 619 (Ga. App. 1998); Cole v. Alton, 567 F.Supp. 1084, 1086 (N.D. Miss. 1983); Neff v. Davenport, 268 N.E.2d 574, 575 (Ill. App. 1971). This may not be the case when increased recovery is available based on the direct liability of the employer (e.g., punitive damages). Kentucky has not yet addressed the issue. However, it is well established that apportionment of damages between employer and employee is improper when the employer’s liability is based solely on derivative liability. See Baldwin v. Wiggins, 289 S.W.2d 729, 731 (Ky. 1956). Although no published case has directly addressed the issue, the Kentucky Court of Appeals has indicated in an unpublished opinion that an employer’s liability for the torts of negligent hiring and supervision is derivative. Divita v. Ziegler, No. 2005-CA-001343-MR, 2007 WL 29390 at *9(Ky. App. Jan. 5, 2007). This is supported by Oakley’s requirement that the employer be aware of the employee’s unfitness for a particular position as well as the creation of an unreasonable risk to the plaintiff; in other words, the employer’s liability is dependent upon a finding of negligence on the part of the employee. See Oakley, 964 S.W.2d at 442. One of the primary reasons supporting the majority rule on agency admissions is that the plaintiff must prove employee negligence no matter what claim is considered, and if they meet that burden then it is inefficient and prejudicial to allow them to enter evidence proving independent employer liability for that negligence when the employer has already
admitted such liability under respondeat superior. See e.g., McHaffie v. Bunch, 891 S.W.2d 822, 826 (Mo. 1995).
C. PUNITIVE DAMAGE CONSIDERATIONS
To obtain punitive damages, a plaintiff must prove, by clear and convincing evidence that the defendant acted against them with oppression, fraud, or gross negligence. See KRS 411.184; Williams v. Wilson, 972 S.W.2d 260 (Ky. 1998); McGonigle v. Whitehawk, 481 F.Supp.2d 835, 841 n. 1 (W.D. Ky. 2007).
Kentucky law appears to provide employers a high level of protection from assessment of punitive damages through vicarious liability. “In no case shall punitive damages be assessed against a principal or employer for the act of an agent or employee unless such principal or employer authorized or ratified or should have anticipated the conduct in question.” KRS 411.184(3). The Kentucky Supreme Court has freely admitted that “Kentucky is the only state with a statute that so broadly limits vicarious liability for punitive damages.” Berrier v. Bizer, 57 S.W.3d 271, 283 (Ky. 2001). As a result, “[v]ery few cases on record have recognized vicarious liability for punitive damages.” McGonigle v. Whitehawk, 481 F.Supp.2d 835, 841 (W.D. Ky. 2007). However, the Kentucky Supreme Court has consistently reaffirmed lower court decisions that allowed punitive damage instructions against employers when the employers either acted themselves or had knowledge of the agent’s activities. See Kentucky Farm Bureau Mut. Ins. Co. v. Troxell, 959 S.W.2d 82 (Ky. 1997); Kroger Co. v. Willgruber, 920 S.W.2d 61 (Ky. 1996); Berrier, 57 S.W.3d at 284. The Kentucky Court of Appeals has allowed punitive damages against employers based on the acts of management; in these instances, the employers did not know of the manager’s actions but had given the manager sole and unfettered discretion to act. See e.g., Northeast Health Mgmt., Inc. v. Cotton, 56 S.W.3d 440 (Ky. App. 2001); Simpson County Steeplechase Ass’n, Inc. v. Roberts, 898 S.W.2d 523 (Ky. App. 1995).
Thus, if there is actual participation or knowledge by the employer, or if the agent in question commanded a high level of seniority and authority, then it is more likely that the employer may be exposed to punitive damages pursuant to KRS 411.184(3). The author finds that KRS 0411.184(3) creates more questions than it answers. Under the reasoning and cases discussed in Williams v. Wilson, supra, it is the author’s opinion that punitive damages are imputed to employers based on ordinary principles of respondeat superior under Kentucky’s constitutional law theory of the “jural rights” doctrine. This is the principle applied by Williams v. Wilson to declare other aspects of the punitive damages statute unconstitutional in the first place. Be forewarned.
The focus for punitive damages shifts to the employer’s conduct in claims for negligent hiring, retention, supervision, and entrustment. Although Kentucky courts will likely consider the claims of negligent hiring, retention, and supervision to be derivative in nature, they will also look to the actions of the employer, rather than the employee, when analyzing claims for punitive damages. See Roman Catholic Diocese of Covington v. Secter, 966 S.W.2d 286 (Ky. App. 1998); Ten Broeck Dupont, Inc. v. Brooks, No. 2005-CA-000893-MR, 2006 WL 1562076 (Ky. App. June 9, 2006).
Louisiana
Michael R. Sistrunk Kyle P. Kirsch Matthew J. Garver McCranie, Sistrunk, Anzelmo, Hardy, Maxwell & McDaniel PC 195 Greenbriar Blvd., Suite 200 Covington, Louisiana 70433 Tel: (504) 831-0946 Fax: (985) 809-9677 Email: [email protected]
A. ELEMENTS OF PROOF FOR THE DERIVATIVE NEGLIGENCE CLAIMS OF NEGLIGENT ENTRUSTMENT, HIRING/RETENTION, AND SUPERVISION
Louisiana employs a pure comparative fault scheme with regard to negligence actions. Within this scheme, there are four recognized theories that expose an employer to liability. These theories include the vicarious liability of the employer for the acts of the employee, as well as the stand-alone theories of negligent entrustment, negligent hiring, negligent retention, and negligent supervision.
1. VICARIOUS LIABILITY OR RESPONDEAT SUPERIOR
a. What are the elements necessary to establish liability under a theory of Vicarious Liability?
The theory of vicarious liability is codified in Louisiana Civil Code Article 2320 which states:
Masters and employers are answerable for the damage occasioned by their servants and overseers, in the exercise of the function in which they are employed….In the above cases, responsibility only attaches, when the masters or employers, teachers, or artisans, might have prevented the act which caused the damage, and have not done it.1
While the actual text of the article denotes some heightened requirement with reference to the “might have prevented” language, the courts have generally applied common-law vicarious liability principles.2 Thus, to maintain an action against an employer for the tortuous acts of an employee, one must demonstrate: (1) that the tortfeasor was in fact an employee, and (2) the employee was in the course and scope of his employment at the time of the tort.
The question of employment is typically straight forward and does not warrant extended analysis. A general (payroll) employer is liable for the torts committed by its employees, but is not liable for torts committed by an independent contractor.3 However, there are several qualified exceptions that can impute the actions of a contractor to an employer.4
1 La. C.C. Art 2320. 2 See Frank L. Maraist & Thomas C. Galligan, Jr., Louisiana Tort Law (Michie Law Publishers 1996), “the judicial interpretation of La. Civil Code Art. 2320 has been codified by La. R.S. 9:3921, which provides in part, ‘notwithstanding any provision in Title III of Code Book III of Title 9 of La. R.S. of 1950 to the contrary, every master or employer is answerable for the damage occasioned by his servant or employee in the exercise of the functions in which they are employed.’” 3 See Frank L. Maraist & Thomas C. Galligan, Jr., Louisiana Tort Law (Michie Law Publishers 1996). 4 For example if the contract between the parties is not terminable “at will” or if the employer retains the power to control the performance of the contractor. Anderson v. New Orleans Pub. Serv., 583 So.2d 829 (La. 1991). Also, an
2 In terms of the course and scope analysis, two theories, the control theory and the enterprise theory, are relevant. The control theory recognizes work as within the “course and scope” if the employer has the right to exercise control over how the work is performed. The enterprise theory requires that the activity in which the employee is engaged at the time of the tort is fairly attributable to the employer as a cost of the employer’s enterprise, and not as a cost of life generally.5 Thus even an employer may not be liable in some instances even if the employee commits an intentional tort on the business premises during work hours.6 Generally, courts consider four factors when assessing vicarious liability. They include whether the tortuous act: (1) was primarily employment-rooted, (2) was reasonably incidental to the performance of employment duties, (3) occurred during working hours, and (4) occurred on the employer’s premises.7 It is not necessary that each factor be present.
In addition to the general rules set forth in the Civil Code, and particularly relevant to the trucking industry, Louisiana also recognizes a theory of “logo liability.” This doctrine is a judicially created mechanism which imposes statutory employer liability on the lessee of a vehicle if the lessee permits a non- employee to operate the leased equipment and that operator causes damages.8 As a statutory employer, the carrier is vicariously responsible for the acts of the operator. The Fifth Circuit has limited this doctrine to cases arising during federally regulated “trip leases” of a tractor-trailer where the logo that appears on the truck is that of the “renting carrier” and not the owner.9 The purpose of this doctrine is to ensure that carriers take control of and responsibility for the leased equipment during the term of the lease.
The watershed case announcing this theory is Simmons v. King.10 In this case, a tractor trailer and its driver were leased to Dubose Trucking Co., a carrier certified by the ICC to transport sugar. The rig rear-ended the plaintiff’s vehicle and Dubose Trucking Co. was held vicariously liable. The Court held that if there is an existing lease between the ICC-authorized carrier and an owner of leased equipment and the equipment bears the carrier’s ICC placard, then the driver of the equipment will be deemed to be the carrier’s statutory employee. Thus, the carrier will be held vicariously liable for the use and/or misuse of the equipment. This vicarious liability is binding even if the leased driver is making a trip during
employer may be held liable for negligently selecting an independent contractor. Hickman v. Southern Pac. Transp. Co., 262 So.2d 385 (La. 1972). 5 See Frank L. Maraist & Thomas C. Galligan, Jr., Louisiana Tort Law (Michie Law Publishers 1996) and Reed v. House of Décor. Inc., 468 So.2d 1159 (La. 1985). 6 See Pye v. Insulation Technologies, Inc., 700 So.2d 892 (La.App. 5th Cir. 1997) where an employer was held not liable when an employee, after questioning a supervisor about reports that the employee’s work was unsatisfactory, struck the supervisor with a piece of wood. 7 Ellender v. Neff Rental, Inc., 965 So.2d 898 (La.App. 1st Cir. 6/15/07). 8 Simmons v. King, 478 F.2d 857, 860 (5th Cir. 1973), Empire Indem. Ins. Co. v. Carolina Casualty Ins. Co., 838 F.2d 1428 (5th Cir. 1988), and Tolliver v. Naor, 2001 WL 755403 (E.D.La). 9 Id. 10 Simmons v. King, 478 F.2d 857, 860 (5th Cir. 1973).
3 the term of the lease but outside the scope of his employment, as long as he continues to display the carrier’s ICC placard.11 The carrier may terminate the lease only if the carrier/lessee: (1) removes its identifying placard from the leased equipment, and (2) obtains a cancellation receipt from the equipment owner.12
2. NEGLIGENT ENTRUSTMENT
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
Under a negligent entrustment theory, the plaintiff must generally allege and prove that (1) the entrustee was incompetent, inexperienced, or reckless; (2) the entrustor knew or had reason to know of the entrustee’s incompetence; (3) that there was an entrustment of a thing; (4) that the entrustment created an appreciable risk of harm to the plaintiff and a duty on the part of the entrustee; and (5) the entrustee’s negligence caused the harm of the plaintiff.13
B. NEGLIGENT RETENTION/HIRING/SUPERVISION
1. WHAT ARE THE ELEMENTS NECESSARY TO ESTABLISH LIABILITY UNDER A THEORY OF NEGLIGENT RETENTION/HIRING/SUPERVISION?
Negligent retention, hiring, and supervision are stand-alone claims of negligence apart from the theory of vicarious liability, although these claims are also rooted in Louisiana Civil Code Article 2320. These causes of action refer to independent acts of negligence committed by the employer. Negligent retention, hiring, and supervision claims are still subject to Louisiana’s default duty-risk analysis. Thus, in order to recover on the theory of negligent retention/hiring/supervision, a plaintiff is required to prove that: (1) an employment relationship existed; (2) that the employee was incompetent; (3) that the employer knew or should have known of the employee's incompetence; (4) that the employee was negligent on the occasion giving rise to the plaintiff's injuries; and (5) that the employer's negligence was a cause in fact and a legal cause of the harm to plaintiff.14
C. DEFENSES
1. TRADITIONAL TORT DEFENSES
11 Empire Indem. Ins. Co. v. Carolina Casualty Ins. Co., 838 F.2d 1428 (5th Cir. 1988). 12 Jackson v. O’Shields et al, 101 F.3d 1083 (U.S. 5th Cir. 1996). 13 The Responsibility of Employers for the Actions of Their Employees: The Negligent Hiring Theory of Liability, 53 Chi.-Kent L.Rev. 717, 730 (1977) and Oaks v. Dupuy, 740 So.2d 263 (La.App. 2nd Cir. 8/18/99). 14 Harris v. Pizza Hut of Louisiana, 455 So.2d 1364 (La. 1984), Smith v. Orkin Exterminating, 540 So.2d 363 (La.App. 1st Cir. 1989), and Roberts v. Benoit, 605 So.2d 1032 (La. 1991).
4 Depending on the facts of the particular case, and given the derivative nature of these theories, traditional tort defenses may apply; such as comparative fault, failure to mitigate damages, superseding and intervening cause, etc.
D. PUNITIVE DAMAGES
1. IS EVIDENCE SUPPORTING A DERIVATIVE NEGLIGENCE CLAIM PERMISSIBLE TO PROVE AN ASSERTION OF PUNITIVE DAMAGES?
In Louisiana, punitive damages are generally not recoverable. However, the Civil Code does permit punitive damages in one situation relevant to the trucking industry. Article 2315.4 states that punitive damages are allowed when the injuries on which the action is based were caused by wanton or reckless disregard for the rights and safety of others by a defendant whose intoxication while operating a motor vehicle was a cause-in-fact of the plaintiff’s injuries.15 This concept is significant when viewed in conjunction with vicarious liability.
There are cases from one Louisiana Circuit Court of Appeal holding that an employer can be held vicariously liable for punitive damages under La. Civ. Code art. 2315.4. However, it should be noted that there is dicta from the Louisiana Supreme Court and another Circuit Court of Appeal casting doubt on this conclusion.16
The Louisiana Supreme Court has made numerous pronouncements regarding the general public policy against punitive damages.17 In Berg v. Zummo the Louisiana Supreme Court examined the legislative history of La. Civ. Code art. 2315.4 noting:
[T]he bill was targeted at intoxicated drivers and was intended to punish the intoxicated defendant . . . [to] punish him financially the way he should be punished by paying additional damages’[citation omitted]. Although there was some discussion about insurance coverage for such damages, there was no discussion that the bill would penalize anyone but the intoxicated driver.18
Given this clear legislative intent the Court held:
We find the legislative history reflects the legislature’s intent to penalize only the intoxicated driver of motor vehicle (sic) and is in line with the narrow construction that this Court gives to penal
15 La. C.C. Art. 2315.4. 16 Berg v. Zummo, 00-1699 (La. 04/25/01), 786 So.2d 708, 717; Darby v. Sentry Ins. Auto. Mut., 07-0407 (La. App. 1 Cir. 03/23/07), 960 So.2d 226, 230 n.1, writ denied, 07-638 (La. 03/28/07), 953 So.2d 59. 17 Ross v. Conoco, Inc., 2002-0299 (La. 10/15/02), 828 So.2d 546, 555( providing “A fundamental tenet of [Louisiana] law is that punitive or other penalty damages are not allowable unless expressly authorized by statute.”) 18 Berg v. Zummo, 00-1699 (La. 04/25/01), 786 So.2d 708, 717.
5 statutes. Thus, we affirm the court of appeal’s holding that La. C.C. art. 2315.4 does not allow the imposition of punitive damages against person[s] who have allegedly contributed to the driver’s intoxication.19
The Berg court did note the two Fourth Circuit decisions finding that an employer can be held liable for punitive damages, but went on in a footnote to make clear that it was reserving judgment on this issue. The footnote specifically advised that “[w]e express no view on whether punitive damages can be imposed against a party who is vicariously liable for general damages resulting from conduct of an intoxicated person, such as an employer.”20
In Ross v. Conoco, which was decided eighteen months after Berg, the Louisiana Supreme Court appears to have rejected the reasoning of the Fourth Circuit jurisprudence holding employers vicariously liable for punitive damages. Ross involved plaintiffs who were seeking punitive damages for wanton and reckless disregard of public safety in the storage of hazardous and toxic substances. The plaintiffs alleged that the defendants conspired to handle hazardous substances and, as a result all of the defendants, were responsible as co-conspirators for the acts of one of the conspirators under La. Civ. Code art. 2324. The Ross court reversed the Third Circuit Court of Appeal’s finding that the co-conspirators could be liable for punitive damages holding “[e]ven if plaintiffs did sufficiently allege a conspiracy to store, handle, or transport wantonly or recklessly the offending vinyl chloride, La. Civ. Code art. 2315.3 does not support the imposition of punitive damages against parties based solely on the physical acts of their co-conspirators.”21 The court instructed that, while La. Civ. Code art. 2324 does provide for solidary liability22 among co- conspirators for damages caused by willful or intentional acts of co-conspirators, it does not apply to punitive damages. The purpose of solidary liability, the court reasoned, is to compel any tortfeasor to pay an entire judgment; whereas, the purpose of punitive damages is to punish and deter similar conduct.23 The court explained:
Additionally, the language of Article 2324 that conspirators are answerable in solido ‘for damage caused by such act’ indicates that the Article imposes solidary liability only for compensatory damages. As the dissenting judge in the court of appeal below points out, this wording is important. See Ross, 805 So.2d at 369(Amy dissenting). It is compensatory damages that recompense a plaintiff for injury caused by a defendant’s act.
19 Berg, 786 So.2d at 717-718. 20 Berg, 786 So.2d at 718, n.6. 21 Ross, 828 So.2d at 552. 22 “Solidary” is the civilian way of saying “Joint and Several” liability. 23 Ross, 828 So.2d at 552, citing, James v. Formosa Plastics Corp., 95-1794 (La. App. 1 Cir.. 04/04/96), 672 So.2d 319.
6 Punitive damages, on the other hand, are not caused by a defendant’s act and are not designed to make an injured party “whole.” Rather, they are meant to punish the tortfeasor and deter specific conduct to protect the public interest. Consequently, we conclude that the solidarity imposed by Article 2324 cannot be used to assess punitive damages against a party based on the acts of co-conspirators. To be subject to punitive damages, each co- conspirator’s individual conduct must fall within the scope of the applicable penal statute.24
The Ross court, in support of its conclusion, looked to the plain language and legislative history of La. Civ. Code art. 2315.3, as well as La. Civ. Code art. 2315.4:
A look at the jurisprudence interpreting Article 2315.4 which was enacted at the same time as Article 2315.3, is also helpful to our analysis . ...
This court in Berg v. Zummo, 00-1699 (La.4/25/01), 786 So.2d 708, adopted the reasoning of Bourque and concluded that the legislature attempted to target only the conduct of the intoxicated driver of the motor vehicle when it passed Article 2315.4; thus, the Article does not allow the imposition of punitive damages against persons who have allegedly contributed to the driver's intoxication. As we are determining here, former Article 2315.3 was similarly targeted only at those parties who directly store, handle, or transport the hazardous substance that harms the plaintiff. Accordingly, alleged co-conspirators cannot be brought within the scope of this punitive statute through the application of Article 2324.
Therefore, even assuming that plaintiffs can successfully prove the existence of a conspiracy among the employer and non-employer defendants to harm or commit a battery upon Ross and Landon by misrepresentation and failure to warn of the hazards of vinyl chloride, we conclude that the non-employer defendants who have never had physical contact with the vinyl chloride at issue cannot be assessed punitive damages under former Article 2315.3 based on the acts of storage, handling, or transportation by alleged co- conspirators. The civil conspiracy set forth in Article 2324, when sufficiently proven, authorizes the award of compensatory damages only.25
24 Id. 25 Ross, 828 So.2d at 554.
7 Prior to Berg, Ross, and the Fourth Circuit cases, a decision was rendered by the United States District Court for the Eastern District of Louisiana concluding that an employer could not be held vicariously liable for punitive damages under La. Civ. Code art. 2315.4. Chief Judge Berrigan noted [in Smith v. Zurich American Ins. Co.], that:
An extensive search of Louisiana case law has located no case that dealt with this issue directly, much less declared that an employer can be held liable separate and apart from the insurer, for punitive damages under Article 2315.4.26
Judge Berrigan determined that the clear language of La. Civ. Code art. 2315.4 applies only to the defendant “whose intoxication while operating a motor vehicle was a cause-in-fact of the resulting injuries.”27 She then went on to apply the rules of law that Louisiana only permits punitive damages when expressly authorized and said statutes are strictly construed to conclude as follows:
Considering these general principles, and the lack of any relevant Louisiana jurisprudence holding an employer liable under this particular statute, [the employer] is entitled to summary judgment dismissing the claims for exemplary damages as provided in Article 2315.4.28
In the most recent decision the First Circuit Court of Appeal, in Darby v. Sentry Insurance, reiterated the Berg courts reservation that holding an employer vicariously liable for punitive damages “may be contrary to the principle of strict construction of punitive statutes, we leave analysis for another day.”29 However, it then went on to reiterate that an employer cannot be held liable for punitive damages via a civil conspiracy allegation nor can the employer be held liable for punitive damages under a negligent entrustment theory.
The above jurisprudence permits an employer to argue that Ross and Darby’s rationale for limiting La. Civ. Code art. 2324 to compensatory damage claims is equally applicable to La. Civ. Code art. 2320. This conclusion is bolstered by the fact that both articles are found in Book II, Title V, Chapter 3 of the Louisiana Civil Code entitled “Of Offenses and Quasi Offenses,” and that Louisiana’s rules of interpretation provide that laws on the same subject matter should be interpreted in reference to each other.30 The first article of Chapter three La. Civ. Code article 2315, forms the basis of all tort liability in Louisiana, and the remaining articles (La. Civ. Code arts. 2316-2324.2) elaborate on the
26 Smith v. Zurich American Ins. Co., 1996 WL 537746 (E.D. La. 1996). 27 Smith, 1996 WL 537746 at p.2. 28 Smith, 1996 WL 537746 at p.2. 29 Darby, 960 So.2d at 230 n.1. 30 La. Civ. Code art. 13.
8 concept of “fault” and under what circumstances a defendant may be held liable for his act or that of a person or thing for which he is responsible. Further, both articles apply to damages “caused” and/or “occasioned” by another person.
The applicable jurisprudence certainly demonstrates that the question of whether an employer can be held vicariously liable for punitive damages is still up in the air in Louisiana and that there appears to be strong support for the proposition that an employer cannot be held liable for such damages.
9
Maine
Wendell G. Large Carol I. Eisenberg Richardson, Whitman, Large & Badger Tel: (207) 774-7474 Fax: (207) 774-1343 Email: [email protected]
A. Elements of Proof for the Derivative Negligence Claims of Respondeat Superior, Negligent Entrustment, Hiring/Retention and Supervision
Not all of the distinct theories by which an employer might be held to have derivative or dependent liability for the conduct of an employee have been adopted in Maine, as detailed below. Derivative or dependent liability simply means that one element of imposing liability on the employer is a finding of culpability by the employee in causing an injury to a third party. In other words, if the driver is exonerated, the carrier cannot be liable1.
1. Respondeat Superior (Let the master answer)
a. What are the elements necessary to establish liability under a theory of Respondeat Superior?
As a general proposition, an employer is liable to a third party injured because of the negligence of an employee who is acting in the course of his employment. Stevens v. Frost, 32 A.2d 164 (Me. 1943); Ottinger v. Shaw’s Supermarkets, Inc., 635 A.2d 948 (Me. 1993). Whether the employee is so acting depends on factual circumstances. The fact that the employee’s predominant motive was to benefit himself or a third person does not necessarily mean that he was not within the scope of his employment. O’Brien v. United States, 236 F. Supp. 792 (D. Me. 1964). Under some circumstances an employer may even be liable for the intentional tort of its employee. McLain v. Training and Development Corp., 572 A.2d 494 (Me. 1990); but an employer will not be held liable for serious crimes of an employee. Mahar v. Stonewood Transp., 823 A.2d 540, 545 (Me. 2003)2. While no Maine Supreme Court decision has ever imposed on an employer vicarious liability for an accident caused by the employee when returning home from work, that possibility was recognized in Spencer v. VIP, Inc., 910 A.2d 366 (Me. 2006).
1 There is at least one exceptional kind of situation where an owner may be held liable for negligence even if the driver is exonerated: if the owner negligently entrusted the motor vehicle to the operator with actual or constructive knowledge of a latent defect in the vehicle. 2 The Mahar court incorporated the holding in Nichols v. Land Transp. Corp., 103 F. Supp. 2d 25 (D.Me. 1999):
In Nichols, a trucking company was sued for the stabbing of a motorist by one of its driver-employees. Concluding that the stabbing was outside the scope of employment, the court observed that the employee was not authorized to leave his truck to stab a motorist, and doing so clearly demonstrated his motivation to serve his personal interests, rather than those of the trucking company. Although Comment a to Restatement (Second) of Agency § 231 (1958) recognizes that a master may reasonably anticipate a servant's minor crimes in the carrying out of the master's business, serious criminal activity, such as brandishing a knife and stabbing a motorist, are both unexpected and different from what is expected from servants in a lawful occupation.
Mahar v. StoneWood Transp., 823 A.2d at 545 (citations omitted).
2 The relatively recent Maine Supreme Court opinion in Mahar discourses helpfully on the imposition of vicarious liability on employers in Maine:
Maine applies the Restatement (Second) of Agency to determine the limits of imposing vicarious liability on an employer. See McLain v. Training & Dev. Corp., 572 A.2d 494, 497 (Me. 1990). Specifically, section 228 of the Restatement provides that a master may be vicariously liable for the actions of its agent when the agent's conduct was within the ‘scope of employment.’ The Restatement (Second) of Agency § 228 provides: (1) conduct of a servant is within the scope of employment if, but only if: (a) it is of the kind he is employed to perform; (b) It occurs substantially within the authorized time and space limits; (c) it is actuated, at least in part, by a purpose to serve the master, and (d) if force is intentionally used by the servant against another, the use of force is not unexpectable by the master. (2) conduct of a servant is not within the scope of employment if it is different in kind from that authorized, far beyond the authorized time or space limits, or too little actuated by a purpose to serve the master.
Mahar v. StoneWood Transp., 823 A.2d at 5443.
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
Maine law recognizes liability based upon the negligent entrustment of an automobile. Pelletier v. Mellon Bank, N.A., 485 A.2d 1002, 1005 (Me. 1985). In
3 The Mahar court also incorporated the First Circuit opinion in Lyons v. Brown, 158 F.3d 605, 609-10 (1st Cir. 1998) interpreting Maine's use of section 228:
Acts relating to work and done in the workplace during working hours are within the scope; negligent performance of duties is within the scope, while serious intentional wrongdoing is outside it; and the motivation of the employee (to serve the master's interests or his own) is often an important element. In further defining ‘scope of employment,’ subsection (2) of section 228 requires that the agent's conduct occur within ‘authorized time or space limits.’ This requirement relates to whether the agent's act was foreseeable, and establishes the principle that ‘the master should not be held responsible for the agent's conduct when that conduct is outside the contours of the employment relationship.’
Mahar v. StoneWood Transp., 823 A.2d at 544-45 (citations omitted).
3 order to prevail on a negligent entrustment claim, a plaintiff must show that defendant had the right to control the property in question, which was entrusted to a third party, on the occasion when the accident occurred. Reid v. Town of Mt. Vernon, 932 A.2d 539, 547 (Me. 2007).
3. Negligent Retention/Hiring
a. What are the elements necessary to establish liability under a theory of negligent retention/hiring?
The Maine Supreme Court has not directly addressed whether such a cause of action should be recognized, but the claim seems to be subject to the same analysis as a potential claim for negligent supervision (see below).
4. Negligent Supervision
a. What are the elements necessary to establish liability under a theory of negligent supervision?
Where an employee is acting outside the scope of his employment, some jurisdictions hold that the employer can be liable for the independent tort of negligent supervision. The Maine Supreme Court has refrained, however, from recognizing that tort, Hinkley v. Penobscot Valley Hosp., 794 A.2d 643 (Me. 2002); Napieralski v. Unity Church of Greater Portland, 802 A.2d 391 (Me. 2002), except where liability is based on the actor’s special relationship with children. Fortin v. Roman Catholic Bishop of Portland, 871 A.2d 1208 (Me. 2005). The Maine Supreme Court has made clear that if it should ever adopt this independent tort, it would require the elements articulated in Restatement (Second) of Torts § 317 (1965) and Restatement (Second) of Agency § 213 (1958). Mahar v. StoneWood Transp., 823 A.2d at 543.
1. Restatement (Second) of Torts § 317 (1965) provides:
A master is under a duty to exercise reasonable care so to control his servant while acting outside the scope of his employment as to prevent him from intentionally harming others or from so conducting himself as to create an unreasonable risk of bodily harm to them, if: (a) the servant (i) is upon the premises in possession of the master or upon which the servant is privileged to enter only as his servant, or (ii) is using a chattel of the master, and (b) the master (i) knows or has reason to know that he has the ability to control his servant, and
4 (ii) knows or should know of the necessity and opportunity for exercising such control.
2. Restatement (Second) of Agency § 213 (1958) provides:
A person conducting an activity through servants or other agents is subject to liability for harm resulting from his conduct if he is negligent or reckless; (a) in giving improper or ambiguous orders or in failing to make proper regulations; or (b) in the employment of improper persons or instrumentalities in work involving risk of harm to others; (c) in the supervision of the activity; or (d) in permitting, or failing to prevent, negligent or other tortious conduct by persons, whether or not his servants or agents, upon premises or with instrumentalities under his control.
B. Defenses
1. Traditional Tort Defenses
Depending on the facts of a particular case, given the derivative nature of these theories, traditional tort defenses may also apply such as comparative fault, failure to mitigate damages, superseding and intervening cause, etc.
C. Punitive Damages
1. Is evidence supporting a derivative negligence claim permissible to prove an assertion of punitive damages?
In Tuttle v. Raymond, 494 A.2d 1353 (Me. 1985), the Maine Supreme Court limited the recovery of punitive damages to those situations where the defendant acted with “malice”: either deliberate ill will toward the plaintiff, or conduct so outrageous that such ill will could be implied. Gross, wanton, or reckless conduct does not support punitive damages; malice must be alleged and proved. In addition, proof of malice must be made by “clear and convincing evidence,” a higher standard than mere preponderance of the evidence.
Inadvertent conduct (for example, drunk driving), no matter how egregious, does not give rise to punitive damages. Even deliberate conduct does not necessarily give rise to punitive damages. Therefore, while there is no specific holding disallowing punitive damages in the case of a derivative negligence claim, punitive damages are rare and difficult enough to obtain in Maine that it is unlikely such a claim would get to a jury or that, if it did, malice could be proved by clear and convincing evidence.
5
Maryland
Robert T. Franklin Franklin & Prokopik, P.C. 2 North Charles Street Suite 600 Baltimore, Maryland 21201 Tel: (410) 230-3623 Fax: (410) 752-6868 Email: [email protected]
A. Elements of Proof for the Derivative Negligence Claims of Respondeat Superior, Negligent Entrustment, Hiring/Retention and Supervision
Generally, an employer in Maryland may be held responsible for the torts of an employee driver under three distinct theories: respondeat superior, negligent hiring and retention, and negligent entrustment.
1. Respondeat Superior
Under this doctrine, an employer may be held vicariously liable for tortious acts committed by an employee, as long as those acts are within the course and scope of that employment. See Oaks v. Connors, 339 Md. 24, 660 A.2d 423 (1995). With respect to the use of motor vehicles, the ‘right to control’ is the key question. “[A] master will not be held responsible for negligent operation of a servant’s automobile, even though engaged at the time in furthering the master’s business unless the master expressly or impliedly consents to the use of the automobile, and . . . had the right to control the servant in its operation, or else the use of the automobile was of such vital importance in furthering the master’s business that his control over it might reasonably [be] inferred.” Dhanraj v. Potomac Elec. Power Co., 305 Md. 623, 627-8, 506 A.2d 224 (1986).
2. Negligent Hiring and Retention
In order to establish a claim for negligent hiring or retention, a plaintiff must prove that the person hiring or retaining the individual who committed the allegedly tortious act owed a duty to the plaintiff, that the person hiring or retaining breached that duty, that there was a causal relationship between the harm suffered and the breach of the duty, and that the plaintiff suffered damages. See Penhollow v. Board of Comm’rs, 116 Md. App. 265, 695 A.2d, 1298 (1997). Where an individual is expected to come into contact with the public, the person hiring or retaining the individual must make some reasonable inquiry before doing so to ascertain the fitness of that individual, or the person hiring or retaining must otherwise have some basis for believing the individual can be relied upon. See Evans v. Morsell, 284 Md. 160, 395 A.2d 480 (1978).
3. Negligent Entrustment
A person is subject to liability when they supply another with a chattel (such as a vehicle), when the supplier knows or has reason to know that because of the other’s youth, inexperience, or otherwise, the vehicle or other chattel may be used in a manner involving unreasonable risk of physical harm. See Herbert v. Whittle, 69 Md. App. 273, 517 A.2d 358 (1986).
Example from Recent Maryland Case
In Schramm v. Foster, 341 F.Supp.2d 536 (D.Md. 2004), the United States District Court for the District of Maryland granted the broker’s motion for summary judgment as to all counts, except negligent hiring. The facts were that a shipper contracted with the broker (third-party logistics) company, C.H. Robinson Worldwide, Inc., to transport soy milk from Missouri to New Jersey. The broker instructed Groff Bros. Trucking, LLC, with which it had a common carrier agreement, to complete the shipment. Groff Bros. arranged for its employee, Foster, to drive the load and during the course of transport through Maryland, a vehicle driven by minor plaintiff Schramm, with minor passenger Thompson, collided with the tractor trailer driver by Foster.
Plaintiffs sued the broker for (1) vicarious liability claiming that Foster was an agent or servant of the broker, or was a statutory employee, pursuant to the Federal Motor Carrier Safety Regulations (“FMCSR”); (2) negligent entrustment; and (3) negligent hiring. There were also additional claims pursuant to the Motor Carrier Act and the FMCSR.
Judgment was granted on the broker’s motion for summary judgment as to the vicarious liability claims, as the driver was not an employee or servant of the broker (and even if an agent was still not a servant as required under Maryland law). Judgment was also granted as to the negligent entrustment count, as the broker did not supply the vehicle to Foster. Judgment was granted as to the MCA and FMCSR claims, as the broker was not a “motor carrier.” The broker’s motion was denied, however, as to the negligent hiring count. The Court reasoned that even though the broker did not hire Foster, the broker had a duty to use reasonable care in the selection of motor carriers with whom it contracted. The Court noted that at a minimum, this would include checking SafeStat and keeping records of carriers to be used to make sure the carrier is not manipulating its business practices to avoid unsatisfactory SafeStat ratings. The Court also noted the broker’s own marketing materials and policy, which indicated that the broker required its carriers to have a satisfactory SafeStat rating. However, in this case, the Court found that the broker was aware that the carrier had no safety rating, rather than a satisfactory rating as required by the broker’s own policy. For these reasons, the Court denied the broker’s motion for summary judgment as to the negligent hiring claim only. The case then settled prior to trial.
B. Defenses
1. Admission of Agency
Maryland has adopted the majority view that once an employer has admitted the agency relationship between it and the employee, it is improper to allow a plaintiff to proceed against the employer on any other theory of derivative or dependent liability.
The negligence of the employee driver must be proven in any event, and in and of itself, when agency has been admitted, is sufficient to “hold the corporate defendant.” Id. Indeed, a plaintiff cannot get a separate award of damages for negligent hiring, supervision or retention or for negligent entrustment, when that plaintiff has already recovered those damages from the corporate employer, by virtue of the agency of the employee and the corporate employer’s vicarious responsibility under the theory of respondeat superior.1 In essence, negligent hiring and retention, or negligent entrustment become superfluous in the event agency has been admitted. In fact, when agency has been admitted, negligent hiring, retention and/or entrustment, cease to be viable causes of action under Maryland law. See Houlihan v. McCall, 197 Md. 130, 137-138 (1951). According to the Houlihan case, once agency has been admitted, the claims of negligent hiring, supervision, retention and/or entrustment become unnecessary and the admission of evidence as to these claims would likely only serve to inflame the jury.
2. Traditional Tort Liability Defenses
Depending on the facts of a particular case, given the derivative nature of these theories, traditional tort defenses may also apply such as statute of limitations (generally 3 years in Maryland for these types of cases) contributory negligence and/or assumption of the risk.
C. Punitive Damages
Punitive damages are virtually never recoverable under any simple tort theory. The necessary elements in a claim for punitive damages under Maryland law have been clearly established since the renowned case of Owens-Illinois, Inc. v. Zenobia, 325 Md. 420, 460 (1992) (“In a non-intentional tort action, the trier of
1 The Maryland Court of Appeals has stated: “Duplicative or overlapping recoveries in a tort action are not permissible.” Smallwood v. Bradford, 352 Md. 8, 24 (1998) citing Monias v. Endal, 330 Md. 274, 287, 623 A.2d 656, 662 (1993); see also Montgomery Ward & Co. v. Cliser, 267 Md. 406, 424-25, 298 A.2d 16, 26 (1972); RESTATEMENT (SECOND) OF JUDGMENTS § 46(2)(b) (1982). facts may not award punitive damages unless the plaintiff has established that the defendant’s conduct was characterized by evil motive, intent to injure, ill will, or fraud, i.e., ‘actual malice.’”). Proof of actual malice must be made by clear and convincing evidence.
The high standard of actual malice now required, must be specifically directed to the plaintiff. Drug Fair of Md., Inc. v. Smith, 263 Md, 341, 352 (1971) (“Actual . . . malice may be characterized as the performance of an unlawful act, intentionally or wantonly, without legal justification or excuse but with an evil or rancorous motive influenced by hate; the purpose being to deliberately and wilfully injure the plaintiff.”). Even if a defendant was found to have negligently hired, retained, and/or entrusted a driver, under Maryland law, it is highly unlikely that a plaintiff could prove the requisite actual malice towards plaintiff. See also Schaefer v. Miller, 322 Md. 297, 300, 587 A.2d 491 (1991); Henderson v. Maryland National Bank, 278 Md. 514, 519, 366 A.2d 1(1976); Siegman v. Equitable Truct Co., 267 Md. 309, 314, 297 A.2d 758 (1972); Battista v. Savings Bank of Baltimore, 67 Md.App. 257, 274, 507 A.2d 203 (1986).
Massachusetts
LeClairRyan 951 East Byrd Street Eighth Floor Richmond, VA 23219 Tel: (804) 783-2003 Fax: (804) 783-2294
*Please note that Massachusetts was prepared by the LeClairRyan office in Massachusetts; however, this office is not a member of USLAW NETWORK, Inc.
A. ELEMENTS OF PROOF FOR THE DERIVATIVE NEGLIGENCE CLAIMS OF RESPONDEAT SUPERIOR, NEGLIGENT ENTRUSTMENT, HIRING/RETENTION AND SUPERVISION
1. Respondeat Superior (“Let the Master Answer”)
a. Common Law Elements Necessary to Establish Respondeat Superior
Under Massachusetts law, an employer is responsible for torts committed by its employees while acting in furtherance of the employer’s business. Clickner v. City of Lowell, 422 Mass. 539, 542 (1996). The initial inquiry is whether there is in fact an employment relationship (also termed a “master-servant” or “principal- agent” relationship) between the negligent individual and the defendant. Dias v. Brigham Medical Associates, 438 Mass. 317, 322 (2002). If there is such a relationship, then the Court will consider three factors to determine if the employee’s tortious conduct occurred within the scope of his employment duties. Wang Laboratories, Inc. v. Business Incentives, Inc., 398 Mass. 854, 859 (1986).
(i) Existence of an Employment Relationship
The first inquiry, whether there is an employment or “master-servant” relationship, involves consideration of many factors, all of which are oriented toward determining whether an individual’s conduct was subject to the principal’s control or right of control. Peters v. Haymarket Leasing, Inc., 64 Mass. App. Ct. 767, 773-74 (2005) (citing to the list of factors identified in Restatement (Second) of Agency § 220(2). The label placed by the parties on their own relationship (e.g., a written independent contractor agreement) is not dispositive, because the courts will not countenance subterfuges designed to evade an employment relationship. Id. at 774. Further, the employer’s right to control need not be absolute or pervasive; even a very attenuated right of control may give rise to an employment relationship. See id. at 774 (noting that taxi drivers enjoy a high degree of independence even with a traditional employment relationship); Konik v. Burke, Moore Co., 355 Mass. 463, 467 (1969) (holding employer liable for employee’s accident even though it could not control precise manner and means of employee’s driving).
(ii) Whether Tortious Conduct Was Within Scope of Employment
In making this determination, the courts will consider three factors: whether the conduct was of the type the employee was hired to perform; whether the conduct occurred within authorized space and time limits; and whether the conduct was motivated at least in part by a purpose to serve the employer. Wang Laboratories, 398 Mass. at 859. The factors are not construed restrictively. Clickner v. City of Lowell, 422 Mass. 539, 542 (1996).
An example of the first factor, whether the conduct was of the type the employee was hired to perform, is that generally an employee’s travel to and from his home to his place of business is not within the scope of employment. Mosko v. Raytheon Co., 416 Mass. 395, 399 (1993). On the other hand, if the employee’s duties specifically require driving, or if the employee does not have a fixed place of employment, then the employee’s driving most likely will be deemed within the scope of employment. See Kelly v. Middlesex Corp., 35 Mass. App. Ct. 30, 32 (1993) (explaining that driver may be deemed within scope of employment “when the purpose of travel between the place of residence and place of business is a mission to further the purposes of the employer, such as when an employee is directed to come to a particular company meeting”); Frassa v. Caulfield, 22 Mass. App. Ct. 105, 109-10 (1986) (where driver was lodged at a school where temporarily employed and necessarily had to travel to eat meals, his trip to restaurant was within scope of employment, because the rule which precludes recovery for injuries sustained in travel to and from the place of employment “has no application to employees who have no fixed place of employment”).
The second factor, whether the conduct was within authorized space and time limits, is illustrated by a case in which a police officer was deemed not to be acting within the scope of his employment, even though he was driving to work in response to a page from his employer, because he was not within the town where he was authorized to act as a police officer, and his scheduled shift had not yet begun. Clickner, 422 Mass. at 543.
The third factor, whether the conduct was motivated to serve the employer, is applied liberally. Thus, where a driver employed by a trucking company committed an intentional assault on someone who interfered with the driver putting gas in his truck, a jury could properly find the assault within the scope of employment, because it was “in response to the plaintiff’s conduct which was presently interfering with the employee’s ability to perform his duties successfully.” Dwyer v. Hearst, 3 Mass. App. Ct. 76, 79 (1975). Cf. Guiffre v. Transportation Services, Inc., 1994 Mass. Super. LEXIS 76 (Mass. Super. 1994) (where driver for transport company was fleeing from police he was not acting within scope of employment, even though he had client as passenger in car, because he was serving his own purpose rather than his employer’s). b. Statutory Presumption
Massachusetts does not recognize the doctrines of “placard liability” or “logo liability” as such. See Kansallis Fin. v. Fern, 421 Mass. 659, 664 (1996). By statute, however, the registered owner of a motor vehicle is presumed to be legally responsible for its driver’s negligence. Mass. Gen. Laws c. 231, § 85A. This presumption is rebuttable, but statute imposes on the defendant the burden of proving the nonexistence of an employment or agency relationship between owner and operator. Cheek v. Econo-Car Rental System, Inc., 393 Mass. 660, 662 (1985); Thompson v. Auto Credit Rehabilitation Corp., 56 Mass. App. Ct. 1, 5 (2002).
2. Negligent Entrustment
a. Elements of a Negligent Entrustment Claim
Where negligent entrustment of a motor vehicle is alleged, a plaintiff must first demonstrate that the defendant had control of the vehicle in question. Peters v. Haymarket Leasing, Inc., 64 Mass. App. Ct. 767, 771 (2005). Then, liability “is predicated on the owner’s having entrusted a vehicle to a person who was incompetent or unfit to use it properly, whose incompetence or unfitness was the cause of the injury to the plaintiff.” Mitchell v. Hastings & Koch Enterprises, Inc., 38 Mass. App. Ct. 271, 276-277 (1995). Generally, to be liable, the entrustor must have had actual knowledge of the unfitness of the driver as contrasted with mere reason to know that the driver was unfit. Id.
b. Examples
A claim for negligent entrustment against a taxi leasing company could be established where a jury could reasonably find that the company knew it was leasing a vehicle to a driver who had only received his taxi license three days earlier, and who had a record of two prior accidents and two prior moving violations. Peters, 64 Mass. App. Ct. at 772.
Where a driver’s license was suspended, the vehicle owner could be liable for negligent entrustment even without actual knowledge of that fact, because an owner has an affirmative duty to ascertain that another is properly licensed before permitting him to operate a vehicle. Mitchell, 38 Mass. App. Ct. at 277.
3. Negligent Retention/Hiring
a. Elements of a Negligent Retention/Hiring Claim
Under a theory of negligent hiring, a plaintiff must demonstrate that the employer was aware or should have been aware of the employee’s unfitness to deal with the employee’s patrons or third parties. Foster v. The Loft, Inc., 26 Mass. App. Ct. 289, 290-91 (1998); Smith v. Law, 1994 Mass. Super. LEXIS 137 (Mass. Super. 1994). Of course, the plaintiff must also demonstrate that the negligence in hiring or retention caused plaintiff’s harm. [Name Redacted] v. Edwards, 62 Mass. App. Ct. 475, 483 (2004). b. Examples
The fact that a snow plow operator was unlicensed and uninsured, in the absence of evidence that he had a history of unsafe automobile or plow operation known to the employer, is insufficient as a matter of law to support a negligent hiring or retention claim. Smith v. Law, 1994 Mass. Super. LEXIS 137 (Mass. Super. 1994).
Evidence that driver had a record of “many violations” including three for driving under the influence of alcohol is sufficient to establish he is an unfit driver. Mitchell, 38 Mass. App. Ct. at 277
4. Negligent Supervision
a. Elements of a Negligent Supervision Claim
To establish the tort of negligent supervision, a plaintiff must prove that (1) the employer knew or should have known of the employee’s proclivity to commit misconduct; (2) the employer failed to take corrective action; and (3) that failure proximately caused actual harm to the plaintiff. Bennett v. Eagle Brook Country Store, Inc., 408 Mass. 355, 358 (1990); Copithorne v. Framingham Union Hospital, 401 Mass. 860, 862 (1988). Even if the purported employee is in fact an independent contractor, the employer may be held liable if it retains some control over the contractor and fails to exercise that control with reasonable care. Cheschi v. Boston Edison Co., 39 Mass. App. Ct. 133, 135-138 (1995). . b. Example
Where a town hired independent contractors to plow its public roads and supervised them in a similar manner as town employees, but allowed them to work excessive hours and plow down the center of two-lane roads, there was sufficient evidence to support a negligent supervision claim. Chiao-Yun Ku v. Town of Framingham, 53 Mass. App. Ct. 727, 730 (2002).
B. DEFENSES
1. Traditional Tort Defenses
Most traditional tort defenses are recognized in Massachusetts including supervening or intervening cause, failure to mitigate damages, etc. The doctrines of contributory negligence and assumption of the risk as complete defenses have been eliminated by statute, and supplanted with a comparative negligence rule set forth in Mass. Gen. Laws c. 231, § 85. Under this statute, a plaintiff’s recovery will be reduced in proportion to her own fault, if any, or barred entirely if her fault exceeds fifty percent.
2. Statutory Defenses
Other statutes containing affirmative defenses commonly asserted in transportation cases include Mass. Gen. Laws c. 90, § 34M, which entitles a defendant to an offset for any amount a plaintiff receives in medical (“personal injury protection”) payments under plaintiff’s own automobile policy; and Mass. Gen. Laws 231, § 6D, which bars a plaintiff from recovering for pain and suffering arising from a motor vehicle accident unless he proves that he incurred reasonable and necessary medical expenses in excess of $2,000, or that his injury involved death, permanent and serious disfigurement, loss of hearing or sight, or a fracture.
C. PUNITIVE DAMAGES
1. Limited Types of Punitive Damages in Massachusetts
Punitive damages are not generally available under Massachusetts law except where expressly permitted by statute. Among the few statutes allowing for punitive damages which may arise in transportation cases are the Wrongful Death Act; the Consumer Protection Act; and the Worker’s Compensation Act.
(a) The Wrongful Death Act
Mass. Gen. Laws c. 229, § 2, provides that punitive damages may be imposed upon a defendant whose gross negligence, or willful, wanton or reckless conduct, causes the death of another. The statute further provides that “a person shall be liable for the negligence or the willful, wanton or reckless act of his agents or servants while engaged in his business to the same extent and subject to the same limits as he would be liable under this section for his own act.”
(b) The Consumer Protection Act
Mass. Gen. Laws c. 93A, § 9 provides that a plaintiff may recover double or triple damages where a defendant knowingly or willfully commits an unfair or deceptive business practice, or refuses to make a fair settlement offer when it has reason to know its conduct was unfair or deceptive. Attorney fees are also available as a remedy for violation of the statute.
(c) The Worker’s Compensation Act
Mass. Gen. Laws c. 152, § 28, provides that: “If [an] employee is injured by reason of the serious and wilful misconduct of an employer … the amounts of compensation hereinafter provided shall be doubled.”
2. Examples
In a wrongful death case, punitive damages were properly awarded against a driver for his gross negligence in operation of a motor vehicle, where evidence showed he drove a car while intoxicated at a high rate of speed and lost control of it, causing an accident. Davis v. Walent, 16 Mass. App. 83 (1983). In the same case, however, gross negligence could not be proven against the owner who entrusted his vehicle to the driver, so a punitive damages verdict against the owner could not be sustained. Id. at 97.
A freight company could not be liable for multiple damages under the Consumer Protection Act, even where it placed “unrealistic demands” on its drivers which may have led to an accident, because “there was nothing unfair or deceptive about [the accident] … it was a negligent act and no more.” Swenson v. Yellow Transportation, Inc., 317 F. Supp. 2d 51, 55 (D. Mass. 2004), citing Dow v. Lifeline Ambulance Service, Inc., 1996 Mass. Super LEXIS 508 (Mass. Super. 1996).
Michigan
Paul E. Scheidemantel Clark Hill PLC 500 Woodward Avenue Suite 3500 Detroit, MI 48226-3435 Tel: (313) 965-8310 Fax: (313) 965-8252 Email: [email protected]
Eric Shih Clark Hill PLC 500 Woodward Avenue Suite 3500 Detroit, MI 48226-3435 Tel: (313) 965-8813 Fax: (313) 965-8252 Email: [email protected] A. Elements of Proof for the Derivative Negligence Claims of Negligent Entrustment, Hiring/Retention and Supervision
1. Respondeat Superior (Let the Master Answer)
a. What are the elements necessary to establish liability under a theory of Respondeat Superior?
Generally speaking, “[t]he test of the liability of the master for his servant’s acts is whether the latter was at the time acting within the scope of his employment. The phrase ‘in the course or scope of his employment or authority’ when used relative to the acts of a servant, means while engaged in the service of his master, or while about his master’s business.” Nevins v. Roach, 249 Mich. 311, 313-14, 228 N.W. 709 (1930). “A master is responsible for the wrongful acts of his servant committed while performing some duty within the scope of his employment. An employer is not vicariously liable for acts committed by its employees outside the scope of employment, because the employee is not acting for the employer or under the employer’s control.” Rogers v. J.B. Hunt Transport, Inc., 466 Mich. 645, 651, 649 N.W.2d 23 (2002). For example, an employee’s negligence while on a frolic or detour, or after hours, is not imputed to the employer. Nor is an employer liable for torts intentionally or recklessly committed by an employee beyond the scope of his employer’s business. Id.; see also Chajnacki v. Dougherty, 254 Mich. 296, 297, 236 N.W. 789 (1931) (“[A] master is not liable for the negligent acts of his servant unless at the time the servant is acting within the scope of his employment or within his actual authority.”).
As applied to motor carriers who do not directly employ their drivers, Michigan “adopt[s] that portion of the statutory employee rule that creates a fictional employment relationship between the driver and carrier and then look[s] to the application of state law for the imposition of liability.” Paul v. Bogle, 193 Mich. App. 479, 488, 484 N.W.2d 728 (1992). A driver is considered to be the “constructive” or “statutory” employee of the carrier when: (1) the carrier does not own the vehicle; (2) the carrier operates the vehicle under an arrangement with the owner that is subject to federal regulation; and (3) the carrier does not literally employ the driver. The doctrine of respondeat superior imposes vicarious liability on the carrier for the negligence of its “employee” driver. Id. at 487. Additionally, a carrier’s failure to remove its identifying placards can be deemed evidence of a carrier’s implied consent to the use of the vehicle, regardless of whose business interests were being pursued at the time of an accident. Id. at 489- 90.
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
“To establish a claim of negligent entrustment involving a motor vehicle, the burden is on the plaintiff to prove that: (1) the motor vehicle was driven with the permission and authority of the owner, (2) the entrustee was in fact an incompetent driver, (3) the owner knew at the time of the entrustment that the entrustee was incompetent or unqualified to operate the vehicle, or had knowledge of such facts and circumstances as would imply knowledge on the part of the owner of such incompetence, and (4) the entrustment was causally connected to the injury for which the plaintiff complains. Brunell v. Snappy Car Rental, Inc., 1999 Mich. App. LEXIS 2495, * 3-4 (Mich. Ct. App. 1999) (citing Perin v. Peuler, 373 Mich. 531, 130 N.W.2d 4 (1964)).
Liability for negligent entrustment arises when “the owner permits an incompetent or inexperienced person to use his chattel with knowledge that such use is likely to cause injuries to others.” Haring v. Myrick, 368 Mich. 420, 423, 118 N.W.2d 260, 261 (1962). “In such circumstances, the owner’s liability is also in part vicarious for it cannot arise unless the person entrusted with the automobile uses it negligently; but, the primary basis for the owner’s liability is said to be his own negligence in permitting its use by an incompetent or inexperienced person with knowledge of the probable consequences. Id. b. See also Hendershott v. Rhein, 61 Mich. App. 83, 232 N.W.2d 312 (1975); Elliott v. A. J. Smith Contracting Co., 358 Mich. 398, 413, 100 N.W.2d 257 (1960).
3. Negligent Retention/Hiring
a. What are the elements necessary to establish liability under a theory of negligent retention/hiring?
This establish a claim for negligent retention/hiring, a plaintiff must prove that: (1) the employer knew or should have known of the employee’s/contractor’s tortious propensities at the time of hiring; and (2) the employer’s negligence was the proximate cause of the plaintiff’s injuries. Under Eger v. Helmar, 272 Mich. 513, 262 N.W. 298 (1935), the plaintiff has the burden to prove that the employer failed to exercise due care in hiring the employee/contractor, and “the mere fact that the [employee/contractor] negligently caused an injury to another affords no presumption that the employer was negligent in his selection” of the employee/contractor. Id. at 519. The court implicitly adopted the view that an employer has a duty to exercise care in hiring and/or retaining workers, and may be held liable if it breaches that duty and causes damage to a plaintiff. See id. In Lincoln v. Fairfield-Nobel Co., 76 Mich. App. 514, 518-19, 257 N.W.2d 148 (1977), the court held that under a negligent hiring or retention theory, the employer’s liability arises out of its own negligent acts, not from its relationship with its employees or contractors. Accordingly, “Under this theory, it would be unnecessary for [the] plaintiff to show any agency relationship between [the plaintiff] and defendant.” Id.
As to an employee’s intentional torts, the Michigan Supreme Court held that “An employer who knew or should have known of his employee’s propensities and criminal record before commission of an intentional tort by [the] employee . . . would be liable for damages” to a customer injured by his conduct. Hersh v. Kentfield Builders, Inc., 385 Mich. 410, 412, 189 N.W.2d 286 (1971) (citing Bradley v. Stevens, 329 Mich. 556, 46 N.W.2d 382 (1951)). The court also held that “an employer must use due care to avoid the selection or retention of an employee whom he knows or should know is a person unworthy, by habits, temperament, or nature, to deal with the persons invited to the premises by the employer” and that “[t]he employer’s knowledge of past acts of impropriety, violence, or disorder on the part of the employee” are generally sufficient to make future tortious acts of a similar nature foreseeable. Id. at 412-13.
4. Negligent Supervision
a. What are the elements necessary to establish liability under a theory of negligent supervision?
Although there is no reported Michigan case addressing this in the context of the employer/employee relationship, Michigan has recognized liability for negligent supervision in the context of parental failure to adequately supervise a child. In Muma v. Brown, 378 Mich. 637, 646, 148 N.W.2d 760 (1967), the Michigan Supreme Court held that “[I]f a parent knows, or could reasonably be expected to know, that an inexperienced minor operator over whom he can exercise supervision and control will undertake to operate a motor vehicle, the availability of which to such inexperienced driver is also under the control of the parent, the parent is under obligation to exercise a high degree of care to render the vehicle unavailable to the child.” The court held that under such theory, “the general rules of negligence must be applied,” meaning that there must be “some act of the parents that was the proximate case of the injurious or damaging act,” and that the harm resulting from the act was a foreseeable result. Id. at 644-45.
b. See also Dortman v. Lester, 380 Mich. 80, 84, 155 N.W.2d 846 (1968) (holding that liability may arise in one for the tortuous conduct of another if the person “controls, or has a duty to use care to control the conduct of another who is likely to do harm if not controlled, and fails to exercise care in such control”); Zapalski v. Benton, 178 Mich. App. 398, 444 N.W.2d 171 (1989) (holding that parents may be liable for failing to prevent their child from intentionally harming another if they are aware or have reason to know of their child’s tortuous propensities).
B. Defenses
1. Admission of Agency is Not a Defense
Admission of agency would not likely serve as a defense to a derivate negligence claim in Michigan. In Perin v. Peuler, 373 Mich. 531, 535, 130 N.W.2d 4, 7 (1964) (overruled on other grounds), the Michigan Supreme Court held that the common law action for negligent entrustment “stands unimpaired by Michigan’s 55-year-old owner-liability statute.” In Perin, the plaintiff filed an action against the defendant father and defendant son, alleging she was injured by the negligent driving of the defendant son, who was operating a car owned by the defendant father. Id. at 547 (Kelly, J., dissenting). The defendant father responded by filing “an answer admitting that the car was being driven by his son with his knowledge and consent,” thereby implicating the owner liability statute. Id. Notwithstanding the danger of prejudice to the defendant who had already admitted liability under one theory of suit, the Court held that “the plaintiff in negligence may rely upon the owner-liability statute to hold the owner responsi[ble] for negligent operation of the latter’s motor vehicle by another, and at the same time rely upon the quoted rule to hold the owner responsi[ble] for personal negligence arising out of negligent entrustment of such motor vehicle.” Id. at 538 (majority opinion).
2. Traditional Tort Defenses
Depending on the facts of a particular case, given the derivative nature of these theories, traditional tort defense such as comparative fault, failure to mitigate damages, superseding and intervening causes, etc., may also apply.
C. Punitive Damages
1. Is evidence supporting a derivative negligence claim permissible to prove an assertion of punitive damages?
It should be noted that punitive damages are generally not recoverable in Michigan. However, “exemplary” damages may be recovered in certain circumstances as an added measure of compensatory damages, usually in cases involving intentional torts. Exemplary damages are intended to compensate for malicious or willful and wanton conduct by the defendant that “inspire[s] feelings of humiliation, outrage and indignity” in the plaintiff. Veselenak v. Smith, 414 Mich. 567, 574, 327 N.W.2d 261 (1982). Inasmuch as Perin v Peuler, 373 Mich. 531, 130 N.W.2d 4 (1964) suggests that evidence supporting a defendant’s liability under a derivative theory of suit is admissible even where the defendant has already admitted liability under an ownership statute or agency theory, Perin would appear to allow introduction of such evidence to support an award of exemplary damages under those circumstances as well.
Minnesota
Mark A. Solheim, Esq. Larson · King, LLP 2800 Wells Fargo Place 30 East Seventh Street Saint Paul, Minnesota 55101 Telephone: (651) 312-6500 Facsimile: (651) 312-6615 [email protected]
A. Elements of Proof for the Derivative Negligence Claims of Negligent Entrustment, Hiring/Retention, and Supervision
In Minnesota, an employer may be subject to derivative liability based on an employee’s conduct under four distinct theories.
1. Respondeat Superior
a. What are the elements necessary to establish liability under a theory of respondeat superior?
A servant must be acting primarily for the benefit of their master at the time of the tort in order for the act to be within the course and scope of employment and thereby impose vicarious liability. Gackstetter v. Dart Transit Co., 269 Minn. 146, 150, 130 N.W.2d 326, 329 (1964); Oldakowski v. M.P. Barrett Trucking, Inc., 680 N.W.2d 590, 593 (Minn. Ct. App. 2004). If the tort in question is committed when the servant is in the pursuit of an activity that is personal, the master is not liable. Id. An employee does not cease to be acting within the scope of employment because of an incidental personal act if the main purpose is still to carry on the business of the employer. Mensing v. Rochester Cheese Express, Inc., 423 N.W.2d 92, 94 (Minn. Ct. App. 1988) (citing Gackstetter, 269 Minn. at 150, 130 N.W.2d at 329). Acts that “are necessary to the life, comfort, and convenience of the [employee] while at work, though strictly personal … and not acts of service, are incidental to the service, and injury sustained in the performance thereof is deemed to have arisen out of the employment.” Id. at 95 (internal citations omitted).
Under the logo liability rule, the motor carrier whose number is displayed on the tractor will be held liable to the public for the negligent operation of the leased vehicle. Acceptance Ins. Co. v. Canter, 927 F.2d 1026, 1027 (8th Cir. 1991); Grinnell Mut. Reins. Co. v. Empire Fire & Marine Ins. Co., 722 F.2d 1400, 1404 (8th Cir. 1983). The carrier’s liability is limited by common law principles of respondeat superior. See Oldakowski v. M.P. Barrett Trucking, Inc., 680 N.W. 2d 590, 592-94 (Minn. Ct. App. 2004) (reversing summary judgment for a trucking company in a negligence action alleging the trucking company was vicariously liable for injuries sustained in unloading hay bales because material issues of fact existed as to whether the carrier’s unloading of the bales was part of the hauling agreement between the trucking company and the plaintiff or was a personal favor); see also Gackstetter, 269 Minn. 146, 150, 130 N.W.2d 326, 329 (holding a trucker was not acting within the scope of his employment when he was driving home from his company’s terminal and had recorded in his log book that he was off duty).
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
Minnesota has adopted Restatement (Second) of Torts § 390: One who supplies directly or through a third person a chattel for the use of another whom the supplier knows or has reason to know to be likely because of his youth, inexperience, or otherwise, to use it in a manner involving unreasonable risk of physical harm to himself and others whom the supplier should expect to share in or be endangered by its use, is subject to liability for physical harm resulting to them.
The duty of the entrustor “runs directly to those who might be put at risk as a result of the negligent entrustment.” Johnson v. Johnson, 611 N.W.2d 823, 827 (Minn. Ct. App. 2000). Negligence in entrusting a chattel to someone who is incompetent creates only the potential for liability; in order for liability to attach the supplier must also be found to be the legal cause of the harm. Axelson v. Williamson, 324 N.W.2d 241, 244 (Minn. 1982).
b. Examples
In Lim v. Interstate System Steel Division, Inc., 435 N.W.2d 830 (Minn. Ct. App. 1989), judgments in wrongful death and personal injury actions were appealed. The consolidated appeals arose from an accident that occurred between a car containing six occupants and an 18- wheel semi driven for Interstate and leased from Gaylon Mills, who employed the driver and received a percentage of the gross revenue from each load. 435 N.W.2d at 831. Five of the six occupants in the car were killed. Id. at 832. The semi driver tested positive for four stimulants after the crash, including one controlled substance for which he did not have a prescription. Id. At trial, the court admitted evidence that the semi driver had been arrested four months earlier for possession of a controlled substance while driving as a Gaylon Mills employee. Id. The court held Gaylon Mills could be held vicariously liable for the driver’s negligence as well as independently liable for negligent entrustment. Id. at 833-34.
3. Negligent Retention/Hiring
a. What are the elements necessary to establish liability under a theory of negligent retention/hiring?
Negligent hiring is “the negligence of an employer in placing a person with known propensities, or propensities which should have been discovered by reasonable investigation, in an employment position in which, because of the circumstances of employment, it should have been foreseeable that the hired individual posed a threat of injury to others.” M.L. v. Magnuson, 531 N.W.2d 849, 857 (Minn. Ct. App. 1995), review denied (July 20, 1995) (citing Ponticas v. K.M.S. Invs., 331 N.W.2d 907, 911 (Minn. 1983)). Direct liability for negligent hiring is therefore “predicated on the negligence of an employer in placing a person with known propensities, or propensities which should have been discovered by reasonable investigation, in an employment position in which, because of the circumstances of the employment, it should have been foreseeable that the hired individual posed a threat of injury to others.” Ponticas v. K.M.S. Invs., 331 N.W.2d 907, 911 (Minn. 1983). Liability is determined by the totality of the circumstances surrounding the hiring, and whether the employer exercised reasonable care. Yunker v. Honeywell, Inc., 496 N.W.2d 419, 422 (Minn. Ct. App. 1993), review denied (Apr. 20, 1993). The degree of care required in hiring depends on the particular duties required by the job. Ponticas, 331 N.W.2d at 913. In order to establish a claim, a plaintiff must also prove proximate cause, which is not to be determined by whether a particular, specific injury is foreseeable; rather, the focus is on the type of previous acts by the person committing the injury. Ponticas, 331 N.W.2d at 912-13.
Negligent retention arises “when, during the course of employment, the employer becomes aware or should have become aware of problems with an employee that indicated his unfitness, and the employer fails to take further action such as investigating, discharge, or reassignment.” Yunker, 496 N.W.2d 419, 423 (Minn. Ct. App. 1993) (quoting Garcia v. Duffy, 492 So.2d 435, 438-39 (Fla. Dist. Ct. App. 1986)). Actual knowledge is not required to support a negligent retention claim. Doe v. Centennial Indep. Sch. Dist. No. 12, No. A04-413, 2004 WL 2939861, at * 3 (Minn. Ct. App. Dec. 21, 2004).
b. Examples
In Ponticas v. K.M.S. Investments, 331 N.W.2d 907 (Minn. 1983), the appellants, the owners and operators of a residential apartment complex, were found liable for negligent hiring by jury verdict in hiring a resident manager who sexually assaulted a female tenant. Id. at 908. At the time he was hired, the manager was on parole following a conviction in another state for armed robbery. Id. at 909. On his application, he indicated he had been convicted of a crime, but described it as “traffic tickets.” Id. at 910. No further inquiry into his criminal history was made before he was hired. Id. The Minnesota Supreme Court held the jury “could have found, as it did, that it was reasonably foreseeable that a person with a history of offenses of violence could commit another violent crime, notwithstanding the history would not have shown him to ever have committed the particular type of offense.” Id. at 912. The Court held that the negligence in hiring found by the jury was the proximate cause of the plaintiff’s injury, and affirmed. Id. at 915-16.
In Jones v. Blandin Paper Co., No. 31-C5-02-1205, 2003 WL 23816532 (D. Minn. Sept. 23, 2003), an employee of a staffing agency who worked at Blandin Paper Company sued Blandin in connection with alleged incidents of sexual harassment. 2003 WL 23816532, at *2. Among the claims alleged was negligent retention. Id. Blandin moved for summary judgment based upon the fact that the plaintiff failed to utilize their sexual harassment procedure in order to provide proper notification. Id. at *3. The plaintiff opposed summary judgment on the basis that Blandin had knowledge that supervisors were sexually harassing employees, but did not discipline the supervisors or terminate their employment. Id. at *11. The court denied Blandin’s motion for summary judgment on the negligent retention claim. Id. at *12. The court held that the plaintiff had presented sufficient evidence to withstand summary judgment by introducing evidence that Blandin’s manager of employee relations had known that sexual misconduct occurred at the Blandin plant, but had chosen to wait to investigate until an employee formally objected to harassment. Id.
4. Negligent Supervision
a. What are the elements necessary to establish liability under a theory of negligent supervision?
Negligent supervision is the failure of an employer “to exercise ordinary care in supervising the employment relationship, so as to prevent the foreseeable misconduct of an employee from causing harm to other employees or third persons.” Cook, 847 F. Supp. at 732. Negligent supervision is derived from the doctrine of respondeat superior, so the claimant must prove that the employee’s actions occurred within the scope of employment in order to succeed on a claim. Id. See also Pecore v. Lewis Truck Lines, Inc., No. C9-94-1710, 1995 WL 81354, at * 3 (Minn. Ct. App. Feb. 28, 1995).
Minnesota does not recognize a cause of action for negligent training. Johnson v. Peterson, 734 N.W.2d 275, 277 (Minn. Ct. App. 2007) (citing M.L. v. Magnuson, 531 N.W.2d 849, 856 (Minn. Ct. App. 1995)).
b. Examples
In Pecore v. Lewis Truck Lines, Inc., No. C9-94-1710, 1995 WL 81354 (Minn. Ct. App. Feb. 28, 1995), the court affirmed summary judgment dismissing a discharged dock supervisor’s claims against his former employer, Lewis Truck Lines, which included breach of contract, intentional infliction of emotional distress, and negligent supervision theories. The plaintiff claimed that his supervisor “had a confrontational supervisory style,” and “frequently reprimanded [the plaintiff] in harsh and severe language that included profanity,” which ultimately caused him to suffer a nervous breakdown. 1995 WL 81354 at *1. In affirming summary judgment, the court noted that even if Lewis Truck Lines had been on notice of the supervisor’s behavior, the plaintiff had not established compensable damages because personal injury, and not just economic loss, is required to sustain a negligent supervision claim. Id. at *3.
B. Defenses
1. Admission of Agency
Minnesota does not follow the majority view that once an employer has admitted to the existence of an agency relationship with an employee it is no longer proper to allow a plaintiff to pursue other theories of derivative or dependent liability. In Minnesota, courts will permit an injured party to proceed under other theories of recovery in addition to vicarious liability. Lim v. Interstate Sys. Steel Div., Inc., 435 N.W.2d 830, 832-33 (Minn. Ct. App. 1989) (holding evidence of negligent entrustment was admissible even though vicarious liability was conceded). See also Jones v. Fleischhacker, 325 N.W.2d 633, 640 (Minn. 1982) (entrustor found both causally negligent and vicariously liable for entrustee’s negligence).
2. Traditional Tort Defenses
Depending on the facts of a particular case, given the derivative nature of these theories, traditional tort defenses may also apply, such as comparative fault, failure to mitigate damages, superceding and intervening causes, etc.
C. Punitive Damages
1. Is evidence supporting a derivative negligence claim permissible to prove an assertion of punitive damages?
A mere showing of negligence is not enough to sustain a claim of punitive damages. Berczyk v. Emerson Tool Co., 291 F. Supp. 2d 1004, 1008 (D. Minn. 2003). Punitive damages are allowed only upon “clear and convincing evidence that the acts of the defendant show deliberate disregard for the rights or safety of others.” Minn. Stat. § 549.20 subd 1.
Punitive damages may be awarded against a master or principal because of an act done by an agent only if (a) the principal authorized the doing and manner of the act; (b) the agent was unfit, and the principal deliberately disregarded a high probability the agent was unfit; (c) the agent was employed in a managerial capacity with the authority to establish policy; or (d) the principal or their managerial agent ratified or approved the act while knowing of its consequences. Minn. Stat. § 549.20 subd. 2.
An award of punitive damages is to be measured by the following factors: (a) the seriousness of hazard to the public arising from the defendant’s misconduct; (b) the profitability of the misconduct to the defendant; (c) the duration of the misconduct and any concealment of it; (d) the level of the defendant’s awareness of the hazard; (e) the defendant’s attitude upon discovery of the misconduct; (f) the number and level of employees involved in causing or concealing the misconduct; (g) the defendant’s financial condition; and (h) the total effect of other punishment likely to be imposed upon the defendant. Minn. Stat. § 549.20 subd. 3.
To determine if a plaintiff has made a proper showing that the defendant demonstrated deliberate disregard for the rights of others, the court will review evidence in support of the motion without considering evidence submitted in opposition. Northwest Airlines, Inc. v. American Airlines, Inc., 870 F. Supp. 1499, 1502-03 (D. Minn. 1994). In determining whether punitive damages should be awarded courts will focus on the defendant’s conduct rather than on the type of damage that is the result of the conduct. Jensen v. Walsh, 623 N.W.2d 247, 251 (Minn. 2001).
2. Examples
In Kay v. Peter Motor Co., 483 N.W.2d 481 (Minn. Ct. App. 1992), a former employee who had been terminated brought suit against her former employer, an automobile dealership, alleging sexual harassment. The trial court awarded punitive damages pursuant to section 549.20, which was challenged on appeal. Id. at 485-86. In considering the award of punitive damages in relation to the factors set forth in section 549.20 subd. 3, the court noted that multiple acts of harassment had occurred during a period of several months, and that the chief executive officer had “failed to bring under control his own conduct, which he knew was offensive and knew or should have known constituted sexual harassment.” Id. at 485 (internal citation omitted). The appellate court concluded that the trial court had properly considered the factors, and that the defendant had failed to demonstrate that the trial court’s award of punitive damages was unreasonable. Id.
Mississippi
Douglas Bagwell Robert Briggs Carr Allison 14231 Seaway Road Building 2000, Suite 2001 Gulfport, MS 39503 Tel: (228) 864-1060 Fax: (228) 864-9160 Email: [email protected]
A. Elements of Proof for the Derivative Negligence Claims of Negligent Entrustment, Hiring/Retention and Supervision
In Mississippi, there exist four distinct theories by which an employer might be held to have derivative or dependent liability for the conduct of an employee. Derivative or dependent liability simply means that one element of imposing liability on the employer is a finding of culpability by the employee in causing an injury to a third party. In other words, if the driver is exonerated, the carrier cannot be liable.
1. Respondeat Superior (Let the master answer)
Since the mid-19th century, the Mississippi Supreme Court has recognized the doctrine of respondeat superior which imputes an employee's negligence to the employer. However, for just as long, the Court has limited this vicarious liability to acts of the employee performed within the scope of the authority conferred. Commercial Bank v. Hearn, 923 So. 2d 202, 204 (Miss. 2006).
The Mississippi Supreme Court has never decided a case on placard liability, but the Fifth Circuit Court of Appeals (the circuit in which Mississippi is contained) has decided several cases on the issue.
Prior to 1996, if the ICC numbers of a carrier were present on the truck at the time of the accident, even if the lease had been terminated, the statutory employment doctrine was applicable and the carrier was liable. In Jackson v. O’Shields, 101 F. 3d 1083 (5th Cir. 1996) the Fifth Circuit Court of Appeals held a lease agreement had been terminated by the carrier because of the owner’s repeated hauling of unauthorized loads and the fact that the carrier notified the owner that the lease was terminated and to remove the carrier’s placards. The Court was unwilling to find liability against the carrier when the carrier had terminated the lease and made a diligent effort to have the owner remove their ICC numbers. The court essentially held that in order to be held liable under the statutory employer doctrine, there must exist a valid lease between the parties or, without a lease, the carrier sought to be held liable must have had an interest in the load being transported at the time of the accident.
2. Negligent Entrustment
Mississippi recognizes that under the doctrine of negligent entrustment, one who supplies directly or through a third person a chattel for use of another whom the supplier knows or has reason to know to be likely because of his youth, inexperience, or otherwise, to use it in a manner involving unreasonable risk of physical harm to himself and others whom the supplier should expect to share in or be endangered by its use, is subject to liability for physical harm resulting to them. Sligh v. First National Bank of Holmes County, 735 So.2d 963, 969 (Miss. 1999).
The ultimate purpose of a claim of negligent entrustment under Mississippi law is to hold an employer, who was negligent in allowing an incompetent employee to use its motor vehicle, liable for the negligent acts committed by that employee. Hood v. Dealers Transport, 459 F.Supp. 684, 685-686 (N.D.Miss. 1978)
3. Negligent Retention/Hiring
In Mississippi, an employer has the duty to exercise reasonable care in hiring its employees and will be charged with an employee’s negligence and be liable for resulting injuries if the employer knew or should have known of the employee’s incompetence. Jones v. Toy, 476 So.2d 30, 31 (Miss. 1985); Thacer v. Brennan, 657 F.Supp.6, 10 (S.D.Miss. 1986).
Several Mississippi federal district courts have held that this duty would likely extend to the training and retention of an employee. This means that under Mississippi law, an employer may be liable for the negligent acts of an employee it knew to be incompetent at the time he was hired or because of events that transpire during the course of his employment, or because it knows that the employee was improperly trained.
4. Negligent Supervision
A person conducting an activity through servants or other agents is subject to liability for harm resulting from his conduct if he is negligent or reckless: (a) in giving improper or ambiguous orders or in failing to make proper regulations; or (b) in the employment of improper persons or instrumentalities in work involving risk or harm to others; (c) in the supervision of the activity; or (d) in permitting, or failing to prevent, negligent or other tortious conduct by persons, whether or not his servants or agents, upon premises or with instrumentalities under his control. Tillman v. Singletary, 865 So.2d 350, 353 (Miss.2003).
B. Defenses
1. Admission of Agency
The Mississippi Supreme Court has never decided a case addressing the effect of an employer admitting the employment relationship on the independent claims of negligent entrustment, negligent retention/hiring and/or negligent supervision. Several federal district court decisions, however, have concluded that Mississippi would adopt the majority view that once an employer has admitted the agency relationship between it and the employee, it is improper to allow a plaintiff to proceed against the employer on any other theory of derivative or dependent liability. Hood v. Dealers Transport, 459 F.Supp. 684 (N.D.Miss. 1978); Cole v. Alton, 567 F.Supp. 1084 (N.D. 1983); Harris v. MVT Services, 2007 U.S.Dist.LEXIS 65709 (S.D.Miss. 2007).
In Harris, which was a case handled by this firm, the district court explained the rationale for such a holding, saying, “in a case such as the one sub judice in which the employer acknowledges liability for the acts of its employee, a plaintiff does not have to depend upon the negligent entrustment doctrine to recover from the employer for his injuries as liability of the employer is already established if the plaintiff can prove negligence of the employee. The need to show that the employer was negligent in having entrusted a motor vehicle to a driver it knew to be incompetent is obviated by the fact that the employer has admitted liability for any acts taken by that driver.” Id. at *4-5(citing Davis v. Rocor International, 2001 U.S.Dist.LEXIS 26216, *19-20 (S.D.Miss.2001)).
2. Traditional Tort Defenses
Depending on the facts of a particular case, given the derivative nature of these theories, traditional tort defenses may also apply such as comparative fault, failure to mitigate damages, superseding and intervening cause, etc.
C. Punitive Damages
In Mississippi, there is no right to punitive damages. Doe ex rel. Doe v. Salvation Army, 835 So.2d 76, 79 (Miss. 2003). Only if certain statutory criteria are met does the court undertake a determination of whether the issue of punitive damages should be submitted to the jury. Id. Punitive damages may not be awarded if the claimant does not prove by clear and convincing evidence that the defendant, against whom punitive damages are sought, acted with actual malice, gross negligence which evidences a willful, wanton or reckless disregard for the safety of others, or committed actual fraud. Id.; Miss.Code Ann. Section 11-1-65.
When deciding whether to submit the issue of punitive damages to a trier of fact, the trial court looks at the totality of the circumstances to determine if a reasonable, hypothetical trier of fact could find either malice or gross neglect/reckless disregard. Doe v. Salvation Army, 835 So.2d at 81. The facts must be highly unusual as punitive damages are only awarded in extreme cases. Gamble ex rel. Gamble v. Dollar General Corp., 852 So.2d 5, 15 (Miss. 2003).
It is also rather clearly established that the right to punitive damages cannot be established by an employer’s alleged past violations of safety regulations; instead the claim for punitive damages must either stand or fall on the conduct of the employee at the time of the alleged negligent act. Hood v. Dealers Transport, 459 F.Supp. 684 (N.D.Miss. 1978); Cole v. Alton, 567 F.Supp. 1084 (N.D. 1983); Choctaw Maid Farms v. Hailey, 822 So.2d 911 (Miss. 2002).
In Hailey, the plaintiff sought to recover punitive damages on the grounds that the defendant trucking company failed to properly train their driver, that the driver’s logs were not up to date at the time of the accident and because the driver had difficulty speaking the English language. The Mississippi Supreme affirmed the trial court’s refusal to grant a punitive damage instruction, standing firm in their previous holdings that motor vehicle accidents rarely, if ever, warrant punitive damages. Hailey, 822 So.2d at 923-924.
Missouri
Kevin L. Fritz Lashly & Baer, P.C. 714 Locust Street St. Louis, Missouri 63101 Tel: (314) 436-8309 Fax: (314) 621-6844 Email: [email protected]
A. Elements of Proof for the Derivative Negligence Claims of Negligent Entrustment, Hiring/Retention and Supervision
In Missouri, there exist four distinct theories by which an employer might be held to have derivative or dependent liability for the conduct of an employee. Derivative or dependent liability simply means that one element of imposing liability on the employer is a finding of culpability by the employee in causing an injury to a third party. In other words, if the driver is exonerated, the carrier cannot be liable.
1. Respondeat Superior (Let the master answer)
a. What are the elements necessary to establish liability under a theory of Respondeat Superior?
A principal or employer is responsible for injury to a third party when its employee commits negligence while acting within the scope and course of his employment. Smoot v. Marks, 564 S.W.2d 231 (Mo. Ct. App. E.D. 1978); Burks v. Leap, 413 S.W.2d 258 (Mo. 1967).
Missouri recognizes the doctrine of placard liability in limited situations. Absent evidence to the contrary, mere presence on a vehicle of a placard furnished by a carrier establishes the carrier’s vicarious liability. A carrier may be held liable for a truck driver’s negligence, without regard to the continuing force of the lease, if the jury finds: (1) that a sign of identifying legend was furnished by a carrier in connection with a lease; (2) that the sign was on the truck at the time of the accident; and (3) that the truck was hauling regulated freight at the time of the accident. This is a rebuttable presumption, however, which can be overcome by evidence that the carrier attempted unsuccessfully to destroy the appearance of a relationship, or that the driver was engaged in an enterprise unrelated to the apparent relationship purpose, i.e. the hauling of freight, or that the driver was not authorized by the owner of the vehicle to use the vehicle at all, regardless of the use made of it, as for instance, operation by a thief. Brannaker v. Transamerican Freight Lines, Inc., 428 S.W.2d 524 (Mo. 1968); Johnson v. Pacific Intermountain Express Co., 662 S.W.2d 237 (Mo. 1983) (en banc); Parker v. Midwestern Dist., Inc., 797 S.W.2d 721 (Mo. Ct. App. E.D. 1990); Robertson v. Cameron Mut. Ins. Co., 855 S.W.2d 442 (Mo. Ct. App. W.D. 1993).
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
This theory requires proof that (1) the employee is incompetent, (2) the employer knew or had reason to know of the incompetence, (3) there was an entrustment of a chattel (vehicle), and (4) the negligence of the employer concurred with the negligence of the employee to harm the plaintiff. McHaffie v. Bunch, 891 S.W.2d 822 (Mo. 1995) (en banc). Stated another way, a carrier can be liable if it entrusts a vehicle to an incompetent or reckless driver.
This theory permits imputation of negligence regardless if the employee was acting within the scope and course of his employment. McHaffie, 891 S.W.2d 822.
b. In Stafford v. Far-Go Van Lines, Inc., 485 S.W.2d 481 (Mo. Ct. App. 1972), the court held that a truck owner/lessor could be held liable under a theory of negligent entrustment because it was reasonably foreseeable that an employee- driver’s “helper” could cause an accident with a truck, even if the “helper” drove the truck without permission of the employee-driver. The truck owner knew of and approved the employee’s use of a “helper” when entrusting the tractor-trailer to the employee-driver.
3. Negligent Retention/Hiring
a. What are the elements necessary to establish liability under a theory of negligent retention/hiring?
In Missouri, the elements of negligent retention are the same as for negligent hiring. Reed v. Kelly, 37 S.W.3d 274 (Mo. Ct. App. E.D. 2001). This theory requires proof that (1) the employer knew or should have known of the employee’s dangerous proclivities at the time of the employee’s hiring, and (2) the employer’s negligence was the proximate cause of the plaintiff’s injuries. J.H. Cosgrove Contractors, Inc. v. Kaster, 851 S.W.2d 794 (Mo. Ct. App. 1993). In other words, liability for negligent hiring turns on whether there are facts from which the carrier knew or should have known of a particular dangerous proclivity of an employee followed by employee misconduct consistent with such proclivity by the employee. McHaffie, 891 S.W.2d 822.
While the employer must have played some role in bringing the offending employee into contact with the injured party, Missouri does not specifically require that the employee’s misconduct occur within the scope and course of his employment. Hare v. Cole, 25 S.W.3d 617 (Mo. Ct. App. W.D. 2000) (“We believe there must be more of a casual connection than simply the fact that the employee was on the way to work and had a random collision.”).
4. Negligent Supervision
a. What are the elements necessary to establish liability under a theory of negligent supervision?
This theory requires proof that (1) the employer knew or should have known of the employee’s dangerous proclivities after the employee’s hiring, and (2) the employer’s negligence was the proximate cause of the plaintiff’s injuries. The key difference between negligent hiring and negligent supervision is the time in which the carrier has reason to know of the employee’s alleged dangerous proclivities.
B. Defenses
1. Admission of Agency/Vicarious Liability
Missouri has adopted the majority view that once an employer has admitted the agency relationship between it and the employee, it is improper to allow a plaintiff to proceed against the employer on any other theory of derivative or dependent liability. McHaffie, 891 S.W.2d 822; Young v. Dunlap, 223 F.R.D. 520 (E.D. Mo. 2004); Jackson v. Myhre, 2007 WL 2302527 (Mo. Ct. App. E.D.); Connelly v. H.O. Wolding, Inc., 2007 WL 679885 (Mo. Ct. App. W.D.); and Hoch v. John Christner Trucking, Inc., 2005 WL 2656958 (Mo. Ct. App. W.D.).
The rationale for this view is explained in McHaffie: “If all the theories for attaching liability to one person for the negligence of another were recognized and all pleaded in one case where the imputation of negligence is admitted, the evidence laboriously submitted to establish other theories serves no real purpose. The energy and time of courts and litigants is unnecessarily expended. In addition, potentially inflammatory evidence comes into the record which is irrelevant to any contested issue in the case.” Id. at 826.
2. Traditional Tort Defenses
Depending on the facts of a particular case, given the derivative nature of these theories, traditional tort defenses may also apply such as comparative fault, failure to mitigate damages, superseding and intervening cause, etc.
C. Punitive Damages
1. Is evidence supporting a derivative negligence claim permissible to prove an assertion of punitive damages?
In Missouri, it is not enough for plaintiffs to establish the predicates for punitive damages by a preponderance of the evidence, the standard for negligence. Lopez- Vizcaino v. Action Bail Bonds, 3 S.W.3d 891, 893 (Mo. Ct. App. 1999). Rather, plaintiffs are held to the higher “clear and convincing standard.” Rodriguez v. Suzuki Motor Corp., 936 S.W.2d 104, 110 (Mo. 1996)(en banc); Lopez-Vizcaino, 3 S.W.3d at 893. The clear and convincing standard is needed to counter-balance the extraordinary nature of an award of punitive damages and to ensure that it is “applied only sparingly.” Rodriguez, 936 S.W.2d 104.
While McHaffie, 891 S.W.2d 822, sets forth the holding that admitting agency prevents a plaintiff from proceeding on any other derivative or dependent liability theory, it left open the possibility that such evidence may be admissible to prove a punitive claim. Id. at 826; see also Young v. Dunlap, 223 F.R.D. 520 (E.D. Mo. 2004); Jackson v. Myhre, 2007 WL 2302527 (Mo. Ct. App. E.D.); Connelly v. H.O. Wolding, Inc., 2007 WL 679885 (Mo. Ct. App. W.D.); and Hoch v. John Christner Trucking, Inc., 2005 WL 2656958 (Mo. Ct. App. W.D.).
Thus, it is possible that a trial court, while precluding a plaintiff from producing additional theories of derivative or dependent liability, may allow the plaintiff to pursue limited discovery to the extent needed to prove a punitive claim. However, before a claim for punitive damages can be submitted to a jury, it is incumbent on the trial court to make a threshold determination that the predicates for such a claim have been proven. Lopez-Vizcaino v. Action Bail Bonds, 3 S.W.3d 891, 893 (Mo. Ct. App. 1999); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). This threshold determination “is a question of law,” and is appropriate for resolution on a motion for partial summary judgment. Perkins v. Dean Machinery Co., 132 S.W.3d 295, 299 (Mo. Ct. App. 2004); Rodriguez v. Suzuki Motor Corp., 936 S.W.2d 104, 110 (Mo. 1996) (en banc).
2. In Flood v. Holzwarth, 182 S.W.3d 673 (Mo. Ct. App. S.D. 2005), the court affirmed a jury’s award of punitive damages against the employer of a tractor-trailer driver, holding that “when an employer is vicariously liable for the acts of his agent, all that is necessary to award punitive damages against the employer is for the agent to be acting in the scope of employment and that his actions meet the level justifying an award of punitive damages.” Id. at 680.
Nebraska
Jill R. Ackerman Baird Holm 1500 Woodmen Tower Omaha, Nebraska 68102 Tel: (402) 344-0500 Fax: (402) 344-0588 Email: [email protected] A. Elements of Proof for Respondeat Superior, as well as the Derivative Negligence Claims of Negligent Entrustment, Hiring/Retention, and Supervision.
1. Respondeat Superior
a. What are the elements necessary to establish liability under a theory of Respondeat Superior?
An employer or principal is liable for injuries cause by the negligent acts of his agent or servant when those acts are done in obedience of the employer's express orders, or done in the scope of servant's employment. Hertzel ex rel. Joplin v. Palmyra School Dist., 733 N.W.2d 578 (2007); Ashby v. First Data Resources, Inc., 497 N.W.2d 330 (1993); Strong v. K & K Investments, Inc., 343 N.W.2d 912 (1984). A servant's conduct is only within the scope of employment if it is: the type of conduct for which he was employed to perform, conduct that is performed substantially within the time and space in which the servant is authorized, and conduct that is intended, at least partially, to serve the employer/principal. Strong, 343 N.W.2d 912.
When the tortious conduct of the servant was for his own personal purpose, and not for furtherance of the principal's business, the principal shall not be held liable. Wolfson Car Leasing Co., Inc. v. Weberg, 264 N.W.3d 178 (1978); Burchmore v. H.M. Byllesby & Co., 1 N.W.2d 327 (1941).
b. Vicarious liability for owners-lessors of trucks for the damages caused by lessees and operators of the leased truck
Section 25-21,239 of the Nebraska Revised Statutes addresses the liability of a party who leases trucks that cause damage to persons or property within the State of Nebraska. The statute applies to any truck that is leased for a period of less than 30 days, or any truck that is leased for commercial purposes for any amount of time. Any truck owner that is covered by the statute shall be found jointly and severally liable for the damage caused by the operator of the leased truck. However, if the owner of the truck carries liability insurance with coverage limits in the minimum amount of one million dollars per occurrence which is available to compensate any person with a claim arising out of the operation or use of the leased truck, truck-tractor, or trailer, s/he won't be held jointly and severally liable for the damage.
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
Negligent entrustment is a theory of liability that permits the owner of a chattel (typically a vehicle) to be held liable for the damage caused by a party that the owner permitted to operate/use the chattel. In order to prove negligent entrustment, it must be shown that: (1) the owner of the vehicle permitted an incompetent driver to operate the vehicle, (2) the owner knew or should have known about the driver's incompetence, and (3) such incompetence was the cause of the injuries that are claimed. Suiter v. Epperson, 571 N.W.2d 92 (1997).
While it does not appear that Nebraska has applied this theory in the employer- employee context, it seems that an employer could be held liable for permitting an incompetent employee to operate a vehicle.
b. Examples of Negligent Entrustment in Nebraska
Car dealer did not negligently entrust "test drive" car to unlicensed driver because the dealer did not know, and did not have a duty to discover, that the driver's license was suspended. – Suiter, 571 N.W.2d 92
An owner who knowingly permits an underaged, unlicensed driver to operate a vehicle is liable for any damage caused by the driver's incompetence. – Gertsch v. Gerber, 226 N.W.2d 132 (1975)
3. Negligent Retention/Hiring
a. What are the elements necessary to establish liability under a theory of negligent retention/hiring?
In Nebraska, the same elements must be proven whether the plaintiff asserts negligent retention or negligent hiring. The plaintiff must prove that: (1) the defendant negligently selected or entrusted work to an employee who was incapable of performing the work and (2) that the employee's incompetence resulted in conduct that was the proximate cause of injury to a third party. Greening by Greening v. School Dist. Of Millard, 393 N.W.2d 51 (1986); Christianson by and through Christianson v. Educational Service Unit No. 16, 501 N.W.2d 281 (1993). Unlike the negligent entrustment theory, Nebraska does not specifically require a Plaintiff to prove that the defendant knew or should have known about the employee's incompetence. Instead, Nebraska requires that the employer exercise reasonable care in hiring or retaining employees. Greening, 393 N.W.2d 51.
An employer is not liable for negligent retention or negligent hiring in Nebraska when harm results from an employees conduct outside the scope of employment. Strong v. K & K Investments, 343 N.W.2d 912 (1984). In Strong, two of the defendant's employees, who had violent histories, were involved in a fight with the plaintiffs outside the hotel where defendant's company Christmas party was held. The court held that defendant was not liable for negligent hiring because the defendant was only responsible for selecting employees that were suitable to perform the work for which they were hired. Id. ("No rule of law requires the employer to search all records that exist to satisfy himself that an employee will not engage in conduct not allied with the purposes for which he was retained.")
4. Negligent Supervision
a. What are the elements necessary to establish liability under a theory of negligent supervision?
In Nebraska, an employer must use reasonable care to prevent employees from harming others if: (1) the employee is (a) on the premises of the employer, or (b) on premises which the employee is only privileged to enter because of his service to the employer, or (c) employee is using the employer's chattel, AND (2) the employer (a) knows or should know that he can control the employee, AND (b) knows or should know of the necessity and opportunity for controlling the employee. Farr v. Cambridge Co-operative Oil Co., 81 N.W.2d 597 (1957).
However, the duty to control employees is not absolute. Farr, 81 N.W.2d 597. If an employer cannot reasonably anticipate that an employee's conduct creates a risk of harm, the employer has no duty to guard against it. Id.
B. Defenses
1. Admission of Agency
The issue as to whether derivative claims of negligent retention, negligent hiring, or negligent supervision can be brought once an agency relationship has been established has not been addressed in the State of Nebraska.
2. Traditional Tort Defenses
Depending upon the nature of the lawsuit, traditional tort defenses of failure to mitigate, contributory negligence, assumption of the risk, superseding/intervening cause, Last Clear Chance Doctrine, workers' compensation bar etc. could be available.
3. Nebraska Probate Code – Non-Claim Provision Pursuant to NEB.REV.STAT. §30-2485(b), all claims which arose against a decedent at or after the death of the decedent are barred against the estate unless a claim is filed within four months after it arises, provided that a notice to creditors has been given in compliance with the Code. However, nothing in this section affects or prevents "[t]o the limits of the insurance protection only, any proceeding to establish liability of the decedent or the personal representative for which he or she is protected by liability insurance." See NEB.REV.STAT. §30- 2485(c)(2). What this means is that if the plaintiff fails to file a timely claim against the estate, to the extent there is insurance coverage available, a plaintiff is not barred from maintaining an action against the decedent. Recovery, of course, would be limited to available insurance coverage. See also Tank v. Peterson, 214 Neb. 34, 332 N.W.2d 669 (1983). This knowledge can be particularly helpful in wrongful death cases
C. Punitive Damages
1. To date, punitive damages are not allowed in the State of Nebraska.
"It is a fundamental rule of law in [the State of Nebraska] that punitive, vindictive, or exemplary damages are not allowed. The measure of recovery in all civil cases is compensation for the injury." Miller v. Kingsley, Sr., 194 Neb. 123, 124, 230 N.W.2d 472, 474 (1975).
DOCS/823610.2
New Jersey
Matthew W. Bauer Connell Foley 85 Livingston Avenue Roseland, New Jersey 07068 Tel: (973) 535-0500 Fax: (973) 535-9217 Email: [email protected]
1893181-01 A. In New Jersey, an employer may be held responsible for the torts of an employee under four theories: Respondeat Superior, Negligent Hiring and Retention, Negligent Supervision, and Negligent Entrustment.
1. Respondeat Superior (Let the Master Answer)
i. What are the elements necessary to establish liability under a theory of Respondeat Superior?
Generally, under New Jersey law, “an employer can be found liable for the negligence of an employee causing injuries to third parties, if, at the time of the occurrence, the employee was acting within the scope of his or her employment.” Carter v. Reynolds, 175 N.J. 402, 408-09 (2003). Therefore, to succeed in bringing a respondeat superior claim, “a plaintiff must prove (1) that a master-servant relationship existed and (2) that the tortious act of the servant occurred within the scope of that employment.” Id. If no master-servant relationship exists, no further inquiry need take place because the master-servant relationship is the sine qua non for the invocation of respondeat superior. Id.
In defining “scope of employment,” New Jersey follows the Restatement (Second) of Agency, § 228 (1957): 1
1) The conduct of a servant is within the scope of employment if, but only if (a) it is of the kind he is employed to perform; (b) it occurs substantially within the authorized time and space limits; (c) it is actuated, at least in part, by a purpose to serve the master, and; (d) if force is intentionally used by the servant against another, the use of force is not unexpected by the master.
2) The conduct of a servant is not within the scope of employment if it is different in kind from that authorized, far beyond the authorized time and space limits or too little actuated by a purpose to serve the master.
DiCosala v. Kay, 91 N.J. 159, 169 (1982).
ii. Placard Liability
1 New Jersey’s Courts have not yet adopted the formulation of respondeat superior given in the Restatement (Third) of Agency. See Restatement (Third) Of Agency § 7.07. The key difference between the Second and Third Restatement is the degree to which the employee must intend his or her actions to be in service of his or her employer before vicarious liability can attach. In the Second Restatement, the conduct is not within the scope of employment if it is “too little actuated by a purpose to serve the master.” Restatement (Second) Of Agency § 228(2) (1958). However, in the Third Restatement, conduct is not within the scope of employment “when it occurs within an independent course of conduct not intended by the employee to serve any purpose of the employer.” Restatement (Third) Of Agency § 7.07(2) (1958) (emphasis added).
- 2 - 1893181-01 New Jersey does not recognize the doctrine of placard liability. Instead, the cases recognize that under the I.C.C. regulations, the carrier/lessee has full and complete responsibility during the term of the lease. A driver/lessor engaged by a carrier within the scope of I.C.C. regulations has in effect become a statutory employee of the carrier and the relationship between the two parties is governed by the I.C.C. regulations. When such a relationship arises, the carrier/lessee takes “exclusive possession, control, and use of the equipment and … the complete assumption of responsibility in response thereto”. Cox v. Bond Transportation, 53 N.J. 186, 201 (1969). There is a presumption that an I.C.C. number affixed to a vehicle signifies who is responsible for the operation of the vehicle; however that presumption may be rebutted. Planet Insurance Co. v. Anglo American Insurance Co., Ltd., 312 N.J. Super. 233 (App. Div. 1998).
3. Negligent Hiring/Retention
i. What are the elements necessary to establish liability under a theory of negligent hiring/retention?
In Di Cosala v. Kay, 91 N.J. 159 (1982), the New Jersey Supreme Court recognized a cause of action for negligent hiring (or in this case retention) explaining:
In short, persons must use reasonable care in the employment of all instrumentalities--people as well as machinery--where members of the public may be expected to come into contact with such instrumentalities. See Comment e. to Restatement (Second) of Agency § 213 ("One who engages in an enterprise must take care to see that all the instrumentalities, human or mechanical, which he uses are such as are not likely to cause harm to third persons.")
Id. at 171-72.
The Supreme Court further distinguished the tort of negligent hiring/retention from respondeat superior liability, noting that a scope of employment limitation is not implicit in the former. Id. at 172-73 (“Thus, the tort of negligent hiring addresses the risk created by exposing members of the public to a potentially dangerous individual, while the doctrine of respondeat superior is based on the theory that the employee is the agent or is acting for the employer. Therefore the scope of employment limitation
- 3 - 1893181-01 on liability which is a part of the respondeat superior doctrine is not implicit in the wrong of negligent hiring.”)
The tort of negligent hiring/retention has two elements of proof that require that the employer 1) knew or had reason to know of the particular unfitness, incompetence or dangerous attributes of the employee and could reasonably have foreseen that such qualities created a risk of harm to another person, and 2) through the negligence of the employer in hiring the employee, the employee’s incompetence, unfitness or dangerous characteristics proximately caused the injury.
Id. at 173-174 (1982)
4. Negligent Entrustment
i. What are the elements necessary to establish liability under a theory of negligent entrustment?
New Jersey law recognizes that an employer may be held responsible for the torts of an employee under a negligent entrustment cause of action. Cosgrove v. Lawrence, 214 N.J. Super. 670, 679 aff’d 215 N.J. Super. 561 (App. Div. 1987). However, New Jersey case law has not expressly addressed the issue of negligent entrustment in an employment context.
In New Jersey Citizens United v. Hernandez, 2006 WL 686571 (App. Div. 2006), the Court defined negligent entrustment as:
It is negligence to permit a third person to use a thing or to engage in an activity which is under the control of the actor, if the actor knows or should know that such person intends or is likely to use the thing or to conduct himself in the activity in such a manner as to create an unreasonable risk of harm to others.
Id. at 4 (citing Restatement (Second) of Torts § 308 (1965).
The Court further held that in an action based on the theory of negligent entrustment, the plaintiff generally must prove that:
(1) the entrustee was incompetent, unfit, inexperienced, or reckless; (2) the entrustor knew (in some jurisdictions actually knew), should have known, or had reason to know of the entrustee's condition or proclivities; (3) there was an entrustment of the dangerous instrumentality; (4) the
- 4 - 1893181-01 entrustment created an appreciable risk of harm to others; and (5) the harm to the injury victim was proximately or legally caused by the negligence of the entrustor and the entrustee.
Id. (citing 57A Am. Jur. 2d Negligence § 318 (2005)).
5. Negligent Supervision
i. What are the elements necessary to establish liability under a theory of negligent supervision?
Employer liability to third parties for the torts committed by its employees may be established under the doctrine of negligent supervision. Cosgrove, 214 N.J. Super. at 679-80. A claim for negligent supervision against an employer by a third party would be based upon acts which were committed by the employee outside of the scope of his/her employment. Id. at 679-80.
To establish a claim of negligent supervision a plaintiff must demonstrate the following elements:
(1) the employer knew or had reason to know of the particular unfitness, incompetence, or dangerous attributes of the employee, (2) the employer could reasonably have foreseen that these qualities created a risk of harm to other persons, and (3) the employer’s negligence and the employee’s unfitness or dangerous characteristic proximately caused the injury to the third party.
See Silvestre v. Bell Atlantic Corp., 973 F.Supp. 475, 486 (D.N.J. 1997).
Thus, a negligent supervision claim might be successful if the employee’s conduct occurred while he or she was subject to the supervision or control of the employer. But even then, the employer generally must have had some reason to anticipate the harmful conduct by the employee before it may be held liable for failing to prevent the harm through proper supervision of employee.
Since the claim of negligent supervision is fairly new in New Jersey, there is only one reported case which addresses such a cause of action brought by a third party against an employer defendant. See Cosgrove, supra. All other cases addressing claims of negligent supervision were filed by an employee against his/her employer. In those cases, the courts consistently
- 5 - 1893181-01 held that an employee cannot assert a claim of negligent supervision against his or her employer. Silvestre, 973 F.Supp. at 486. Under New Jersey law an action in negligence against an employer is barred by the New Jersey Workers’ Compensation Act, N.J.S.A. §34:15-8. Id. citing Fregara v. Jet Aviation Bus. Jets, 764 F.Supp. 940, 954 n.8 (D.N.J. 1991)).
B. Defenses
Traditional Tort Defenses -
Depending on the facts of a particular case, traditional tort defenses may apply such as comparative fault, failure to mitigate damages, superceding or intervening causes, and collateral source.
C. Punitive Damages
Punitive damages are awarded as punishment when a party's conduct is particularly egregious. Nappe v. Anschelewitz, Barr, Ansell & Bonello, 97 N.J. 37, 48 (1984). Such damages are warranted when a defendant's conduct is wantonly reckless or malicious. There must be an “intentional wrong in the sense of an evil-minded act or an act accompanied by wanton and willful disregard of the rights of others." Tonelli v. Khanna, 238 N.J. Super. 121, 129, (App.Div.1990). Punitive damages serve an "admonitory function" of "expressing society's disapproval of intolerable conduct and deterring such conduct where no other remedy would suffice." Liptak v. Rite Aid, Inc., 289 N.J. Super. 199, 218 (App. Div. 1996)
Punitive damages may not be recovered against an employer for the wrongful acts of its employees unless (1) the act was specifically authorized, participated in, or ratified by the employer; or (2) the employee who committed the wrongful at or authorized or ratified it was so high in authority as to be fairly considered executive in character. Winkler v. Hartford Accident & Indemnity Co., 66 N.J. Super. 22, 29 (App. Div. 1961). Ratification of an employee’s action can come in many forms, including by the employer participating in a joint defense with the employee. Cappeillo v Ragen Precision Industries, Inc., 192 N.J. Super. 523, 531 (App. Div. 1984).
- 6 - 1893181-01
New Mexico
Timothy C. Holm Matthew W. Park Modrall Sperling Post Office Box 2168 Bank of America Centre 500 Fourth Street NW, Suite 1000 Albuquerque, New Mexico 87103-2168 Telephone: 505.848.1800 Email: [email protected]
A. Elements Of Proof For The Derivative Negligent Claim Of Negligent Entrustment, Hiring/Retention And Supervision
In New Mexico, there are four distinct theories by which an employer might be held to have derivative or dependent liability for the conduct of an employee.1 The definition of derivative or dependent liability is that the employer can be held liable for the fault of the employee in causing to a third party.
1. Respondeat Superior
a. What are the elements necessary to establish liability under a theory of Respondeat Superior?
An employer is responsible for injury to a third party when its employee commits negligence while acting within the course and scope of his or employment. See McCauley v. Ray, 80 N.M. 171, 180, 453 P.2d 192 (1968), rehearing denied (1969); Sutton v. Chevron Oil Company, 85 N.M. 679, 515 P.2d 1283 (1973). NMUJI Civ.13-407 provides that:
An act of an employee is within the scope of employment if:
1. It was something fairly and naturally incidental to the employer's business assigned to the employee, and
2. It was done while the employee was engaged in the employer's business with the view of furthering the employer's interest and did not arise entirely from some external, independent and personal motive on the part of the employee.
New Mexico has not addressed the doctrine of placard liability or “logo liability.” Cf., Rodriguez v. Ager, 705 F.2d 1229, 1236 (10th Cir. 1983) (recognizing the doctrine of placard liability/logo liability in the Tenth Circuit). However, New Mexico does acknowledge that under the Interstate Commerce Commission (“ICC”) regulations, the carrier/lessee has full and complete responsibility during the term of the lease. Matkins v. Zero Refrigerated Lines, Inc., 93 N.M. 511, 513, 602 P.2d 195 (Ct. App. 1979). It follows that the driver/lessor would become, for liability purposes, the employee of the carrier. See id. The plaintiff retains the burden of establishing that the employee was within the course and scope of his employment at the time of the accident. Los Ranchitos v. Tierra Grande, 116 N.M. 222, 226, 861 P.2d 263 (Ct. App. 1993); NMUJI Civ. 13-407. Whether an employee’s actions come within the scope of employment is generally a question of fact to be determined on a case by case basis. Los Ranchitos, 116 N.M. at 226; see also Horanburg v. Felter, 2004- NMCA-121, ¶ 12-13, 136 N.M. 435, 99 P.3d 685 (distinguishing the legal term of art
1 Where trucking and transportation cases are not available to illustrate a particular point of law, this article will cite to applicable New Mexico cases within the employment context.
1 “within the course and scope of employment” from an action which is merely “employment related”).
b. Representative New Mexico cases
The case Benham v. All Seasons Child Care, Inc., 101 N.M. 636, 686 P.2d 978 (Ct. App. 1984), cert. denied, 101 N.M. 686, 687 P.2d 743 (1984), stands for the proposition that permission to use an automobile can be limited in scope. In Benham, an employee was involved in an accident while on a personal mission with his employer's van, which he was authorized to use. Id. at 637. Proof or admission of ownership creates a presumption that the driver of a vehicle causing damages is the servant of the owner and using the vehicle in the master's business. This presumption is sufficient in the absence of evidence to the contrary to support a theory of respondeat superior. See id. at 638-39. But it is only a presumption of law and not evidence. Thus, when contradictory evidence is introduced the presumption disappears as though it had never existed. Id. In Benham, the employer was not liable because the employee was on a personal mission and respondeat superior liability is premised upon whether or not an employee is acting within the scope of his employment. Id. at 639.
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
This theory requires proof that: 1) the owner or person in control of the vehicle permitted another person to operate the vehicle; 2) the owner or person in control of the vehicle knew or should have know that that person was likely to use the vehicle in such a manner as to create an unreasonable risk of harm to others; 3) the person driving the vehicle was negligent in its operation; and 4) that negligence was the cause of the injury to another person. See Spencer v. Gamboa, 102 N.M. 692, 693, 699 P.2d 623 (Ct. App. 1985). Stated another way, New Mexico law recognizes that one who negligently entrusts a motor vehicle to an incompetent driver may be liable for injury to a third person caused by the driver’s incompetence.
Unlike respondeat superior, the theory of negligent entrustment permits imputation of negligence regardless of whether the employee was acting within the course and scope of his employment. See e.g., Bryant v. Gilmer, 97 N.M. 358, 360, 639 P.2d 1212 (Ct. App. 1982) (court’s sole inquiry to establish negligent entrustment was whether employer knew or should have known that employee was an unsafe driver).
See also § 65-2A-19 NMSA 1978 (safety requirements for motor vehicles and drivers used in compensated transportation); § 65-3-7 (qualifications of drivers); § 65-3-14 (drug and alcohol testing program; report of positive test).
2 b. Representative New Mexico cases
In the negligent entrustment context, New Mexico law states that only when the entrustor knew or should have known that the entrustee was not qualified to engage in the activity does a duty to investigate exist. See Spencer v. Gamboa, 102 N.M. 692, 694, 699 P.2d 623 (Ct. App. 1985) (holding that car dealers are under no affirmative duty to learn the qualifications of customers when allowing test drives of automobiles); DeMatteo v. Simon, 112 N.M. 112, 812 P.2d 361 (Ct. App. 1991) (holding that an employer who failed to fully investigate a driver's record despite knowledge of several traffic citations negligently entrusted a vehicle); McCarson v. Foreman, 102 N.M. 151, 157, 692 P.2d 537 (Ct. App. 1984) (holding that evidence of an employer's knowledge of an employee's DWI conviction and cocaine charges was sufficient to support a jury finding that employer negligently entrusted a vehicle); Hermosillo v. Leadingham, 2000-NMCA-96, ¶ 16, 129 N.M. 721, 13 P.3d 79 (holding that personal injuries sustained from a traffic driven by defendant wife was not negligent entrustment when couple was estranged and had been living separately for approximately two months and husband lacked control and legal authority over the vehicle); Cf. Sanchez v. San Juan Concrete Co., 1997-NMCA-68, 123 N.M. 537, 943 P.2d 571 (where driver “smelled like a brewery” employer’s summary judgment motion on negligent entrustment issue could not survive, as employer may have been grossly negligent for not investigating the driver’s fitness).
3. Negligent Hiring/Retention.
a. What are the elements necessary to establish liability under a theory of negligent retention/hiring?
In New Mexico, the elements necessary to prove negligent retention are the same as for those needed to prove negligent hiring. Lessard v. Coronado Paint and Decorating Center, 2007-NMCA-122, ¶ 28, 168 P.3d 155. This theory requires proof that 1) the employee was unfit, considering the nature of the employment and the potential risk to those with whom he would foreseeably associate; 2) the employer knew or should have known that the employee was unfit; 3) the employer’s negligence was a proximate cause of the plaintiff’s injuries. Id.
An employer may be held liable for negligent hiring or retention, even if the employer is not vicariously responsible for the employee’s negligent acts under a theory of respondeat superior. Id. at ¶ 40. As a general rule, New Mexico precludes imposing vicarious liability on an employer for its employee’s negligent use of a personal vehicle while driving to and from work. Id. at ¶ 17 (“three circumstances . . . must exist in order to impose vicarious liability on an employer for an employee’s negligent actions in driving a personal vehicle to and from work: 1) the employer must expressly or impliedly consent to use of the vehicle; 2) the employer must have the right to control the employee in his operation of the vehicle, or the employee’s use of the vehicle must be so important to the business of the employer that such control
3 could be inferred; and 3) the employee must be engaged at the time in furthering the employer’s business”).
See also § 65-2A-19 NMSA 1978 (safety requirements for motor vehicles and drivers used in compensated transportation); § 65-3-7 (qualifications of drivers); § 65-3-14 (drug and alcohol testing program; report of positive test).
b. Representative New Mexico cases
The New Mexico Court of Appeals has declined to draw a bright-line rule precluding recovery in a negligent hiring or retention claim if the employee was not acting within the course and scope of his employment. Lessard, 2007-NMCA at ¶ 40. It is well settled that an employer may be liable for negligently hiring or retaining an employee even if the employee's acts were outside the scope of his employment. Id. Whether the employee was acting within the course and scope of employment is but one factor that the fact-finder may consider in determining foreseeability in the context of proximate cause. Id.
In F & T Co. v. Woods, 92 N.M. 697, 701, 594 P.2d 745 (1979), the New Mexico Supreme Court held that even if the company was negligent in the hiring or retention of the employee, such negligence must be the proximate cause of the incident.2 “Whether the hiring or retention of an employee constitutes negligence depends upon the facts and circumstances of each case.” Id. at 701. For example, notice of an employee's drinking problem and violent propensities may make an assault and battery by that employee on a business invitee or customer foreseeable. Valdez v. Warner, 106 N.M. 305, 308, 742 P.2d 517 (Ct. App. 1987) (Injured invitee was entitled to instruction on negligent hiring because bar hired employee with a background of violence for a job where he would be in constant contact with the public, many of whom would have been drinking and argumentative).
4. Negligent Training/Supervision
a. What are the elements necessary to establish liability under a theory of negligent training/supervision?
One can sue an employer on the theory that their negligent training and supervision of their subordinates caused the misconduct. This theory requires proof that 1) the employer failed to exercise reasonable care in training or supervising the employee; and 2) the employer’s negligence was a proximate cause of the plaintiff’s injuries. Gonzales v. Southwest Security & Protection Agency, Inc., 100 N.M. 54, 56-57, 665 P.2d 810 (Ct. App. 1983); see also § 65-2A-19 NMSA 1978 (safety requirements for motor vehicles and drivers used in compensated transportation); § 65-3-7
2The court held that: 1) the company was not liable under a negligent hiring theory for the criminal act of the employee because, as a matter of law, the act of the employee could not have been foreseen by the company at the time it hired the employee; 2) the rape of the injured party by the employee was not foreseeable by the company, nor was it a natural or probable result of the company's retention of the employee.
4 (qualifications of drivers); § 65-3-14 (drug and alcohol testing program; report of positive test).
b. Representative New Mexico cases
Gonzales v. Southwest Sec. & Protection Agency, 100 N.M. 54, 56, 665 P.2d 810 (Ct. App. 1983) (the court concluded that defendant negligently equipped, trained, supervised and retained the guards, and that Southwest's negligence was the cause of Gonzales' harm). Moreover, the New Mexico Court of Appeals recently held that an employer may be liable for negligent supervision “even though it is not responsible for the wrongful acts of the employee under the doctrine of respondeat superior.” See Cain v. Champion Window Co., 2007-NMCA-85, ¶ 18, 164 P.3d 90 (claim for negligent supervision where an employee installed a gas furnace on his own time, using his own truck). The court affirmed that “the proper standard for determining whether an employer should be held liable for negligent supervision or retention of an employee [is] . . . whether the employer knew or reasonably should have known that some harm might be caused by the acts or omissions of the employee who is entrusted with such position." Id. at ¶ 19, quoting Los Ranchitos, 116 N.M. at 228. Further, there must also be “a connection between the employer's business and the injured plaintiff.” Id., quoting Valdez, 106 N.M. at 307. Here, the claim was dismissed because the employer did not pay for the stove installation, it was not done on the employer’s premises, and the employer did not know that the stove was going to be installed which precludes the issue of negligent supervision. Id. at ¶ 20.
B. Defenses
1. Admission of Agency
New Mexico has not specifically adopted or rejected the majority view that once an employer has admitted an agency relationship with the employee, it is improper to allow a plaintiff to proceed against the employer on any theory of derivative or dependent liability.
However, the New Mexico Court of Appeals has indicated in dicta that it might adopt the majority view. See Ortiz v. New Mexico State Police, 112 N.M. 249, 252, 814 P.2d 117 (Ct. App. 1991) (citing with approval various cases holding that evidence that is relevant only to negligent entrustment is inadmissible when owner admits agency so that vicarious liability is established). Even if New Mexico did adopt this majority view, it would likely only do so to the extent that these theories duplicated each other. For instance, if plaintiff had a claim for punitive damages derived from negligent hiring, then the employer would not be able to do away with that claim simply by admitting vicarious liability. See id.
5 2. Traditional Tort Defenses
All traditional tort defenses (such as comparative fault, failure to mitigate damages, independent intervening cause etc.) may be used to defend against any of the above claims.
C. Punitive Damages
1. Is evidence supporting a derivative negligence claim permissible to prove an assertion of punitive damages?
In New Mexico, there is not a heightened burden of proof for punitive damages, as there is in some other states. Rather, the standard is simply proof by a preponderance of the evidence. Jessen v. National Excess Ins. Co., 108 N.M. 625, 628, 776 P.2d 1244 (1989); United Nuclear Corp. v. Allendale Mut. Ins. Co., 103 N.M. 480, 485, 709 P.2d 649 (1985).
Punitive damages can be recovered for negligent entrustment, negligent retention/hiring, and negligent supervision/training, provided that there is evidence that the employer’s conduct was malicious, willful, reckless or wanton. See e.g., NMUJI Civ. 13-1827. Additionally, punitive damages can be awarded for vicarious liability if: 1) the conduct of the agent or employee was malicious, willful, reckless, wanton, fraudulent or in bad faith; 2) the agent or employee was acting in the scope of his or her employment and had sufficient discretionary or policymaking authority to speak and act for the employer with regard to the conduct at issue, independently of higher authority; or 3) the employer in some other way authorized, participated in or ratified the conduct of the agent or employee. Id.
Before a claim for punitive damages can be submitted to a jury, it is incumbent on the plaintiff to make a prima facie case of entitlement to punitive damages. Sloan v. State Farm Mutual Auto. Ins. Co., 135 N.M. 106, 112, 85 P.3d 230 (2004); Green Tree Acceptance v. Layton, 108 N.M. 171, 174, 769 P.2d 84 (1989); Mitschelen v. State Farm Mut. Auto. Ins. Co., 89 N.M. 586, 593, 555 P.2d 707 (Ct. App. 1976). This threshold determination may be appropriate for resolution on a motion for partial summary judgment (see, e.g. Regenold v. Rutherford, 101 N.M. 165, 167, 679 P.2d 833 (Ct. App. 1984)), although typically a court would wait until the directed verdict stage. McGinnis v. Honeywell, Inc., 110 N.M. 1, 9, 791 P.2d 452 (1990); Leon, Ltd. v. Carver, 104 N.M. 29, 31, 715 P.2d 1080 (1986); McNeill v. Rice Eng’g & Operating, Inc., 133 N.M. 804, 806, 70 P.3d 794 (Ct. App. 2003).
2. Representative New Mexico cases
A Tenth Circuit decision explained New Mexico’s punitive damage rule as follows: “punitive damages may not be imposed on an employer for the misconduct of an employee absent some evidence that the employer in some way contributed to, or participated in, the employee's misconduct.” Campbell v. Bartlett, 975 F.2d 1569,
6 1582 (10th Cir. 1992) (construing New Mexico law). The court held that trucking officials who knew a driver had been convicted of a DWI several years earlier, but had not had an incident since, were not liable for punitive damages in an accident because “the evidence [of the previous alcohol related crime] was too remote and unconnected with the grossly negligent conduct of Bartlett in the October 1986 accident to meet the standard under New Mexico law.” Id. at 1583.
K:\dox\client\53005\1952\W0765540.DOC
7
New York
Jennifer A. Casey Brendan T. Fitzpatrick Ahmuty, Demers & McManus 200 I.U. Willets Road Albertson, NY 11507 Tel: (516) 294-5433 Fax: (516) 294-5387 Email: [email protected]
Albert J. D’Aquino John Jablonski Michael Brophy Goldberg Segalla, LLP 665 Main Street / Suite 400 Buffalo, New York 14203-1425 Tel: (716) 566-5400 Fax: (716) 566-5401 Email: [email protected]
A. Theories of liability
In New York, an employer can be held liable to an injured party for the acts of its employee under a variety of theories. When an employer-employee relationship exists, the choice of theories is mutually exclusive. An injured party may sue for either respondeat superior or negligent hiring, retention, and training. The injured party cannot proceed under both theories. Karoon v. New York City Transit Auth., 241 A.D.2d 323, 659 N.Y.S.2d 27 (1st Dep’t 1997). This is because if the employee was not negligent, there is no basis for imposing liability upon the employer, and if the employee was negligent, the employer must pay regardless of the reasonableness in hiring, retaining, or training. Eifert v. Bush, 27 A.D.2d 950, 279 N.Y.S.2d 368, aff’d, 22 N.Y.2d 681, 291 N.Y.S.2d 372 (1968). Another theory plaintiffs can sue under is where the employer exerts sufficient control over an independent contractor.
1. Respondeat Superior/vicarious liability
The doctrine of respondeat superior renders an employer vicariously liable for torts committed by an employee acting within the scope of their employment “so long as the tortuous conduct is generally foreseeable and a natural incident of the employment.” Judith M. v. Sisters of Charity Hosp., 93 N.Y.2d 932, 933, 693 N.Y.S.2d 67 (1999). If the employee is acting within the scope of their employment, this will render the employer liable for any damages caused by the employee’s negligence. Weinberg v. Guttman Breast and Diagnostic Institute, 254 A.D.2d 213, 679 N.Y.S.2d 127 (1st Dep’t 1998). The test of whether an act was done within the scope of employment is whether the act was done while the servant was doing the master’s work, no matter how irregularly, or with what disregard of instructions. Riviello v. Waldron, 47 N.Y.2d 297, 418 N.Y.S.2d 300 (1979).
While simply stated, the Court in Riviello noted that this rule “depends largely on the facts and circumstances peculiar to each case”. Id., 47 N.Y.2d at 302. It included not only acts undertaken at the employer’s explicit direction, but “also encompasses the far more elastic idea of liability for ‘any act which can fairly and reasonably be deemed to be an ordinary and natural incident or attribute of that act’”. Id., at 303 (citation omitted). The Court ruled that this question was “ordinarily” left for the jury to decide. Id.
2. Negligent hiring, retention, and supervision
In cases where an employer cannot be held vicariously liable for its employee’s torts, the employer can still be held liable under the theories of negligent hiring, negligent retention, and negligent supervision. The key element that an injured party must demonstrate is that “the employer knew or should have known of the employee’s propensity for the conduct which caused the injury.” Sato v. Correa, 272 A.D.2d 389, 707 N.Y.S.2d 371 (2d Dep’t 2000). Therefore, notice of the relevant tortious propensities of the wrongdoing employee is necessary. Gomez v. City of New York, 304 A.D.2d 374, 758 N.Y.S.2d 298 (1st Dep’t 2003).
3. Independent contractors
The general rule in New York is that an employer that hires an independent contractor is not liable for the negligent acts of the independent contractor or its employees. Chainani v. Bd. of Ed. of the City of New York, 87 N.Y.2d 370, 639 N.Y.S.2d 971 (1995). This rule is based upon the premise that one who employs an independent contractor has no right to control the manner in which the work is to be done and, thus, the risk of loss is more sensibly placed on the contractor. Filiberty v. Damon, 72 N.Y.2d 112, 531 N.Y.S.2d 778 (1988).
The general rule is subject to several exceptions that fall roughly into three categories that derive largely from public-policy concerns. Kleeman v. Rheingold, 81 N.Y.2d 270, 598 N.Y.2d 149 (1993). These categories include: (1) negligence of the employer in selecting, instructing, or supervising the contractor; (2) employment for work that is inherently or abnormally dangerous; and (3) instances in which the employer is under a specific non-delegable duty. Id., 598 N.Y.S.2d at 152.
While the question of whether an actor is an independent contractor or an employee is usually a factual question for a jury, where there is no conflict in the evidence, the court may properly determine the question as a matter of law. Shapiro v. Robinson, 102 A.D.2d 822, 476 N.Y.S.2d 596, aff’d, 63 N.Y.2d 896, 483 N.Y.S.2d 203 (1984). In Shapiro, plaintiff was involved in an accident with a truck driven by John Robinson. Scodek Construction had hired Robinson to haul a tractor-trailer. Scodek argued that it could not be liable because Robinson was an independent contractor. This Court agreed. Id., 476 N.Y.S.2d at 597. In its decision, this Court noted that there was no showing that Scodek reserved a right of control over Robinson in the manner in which the work was to be performed, Robinson furnished his own truck, he set his own route, had his own business, and only worked for Scodek on specific jobs. Id.
In its decision that affirmed this Court’s dismissal of plaintiff’s case, the Court of Appeals held that there was no tender of evidence to support plaintiff’s position that Robinson was an employee of Scodek. Id., 483 N.Y.S.2d at 204. The Court continued that plaintiff failed to prove that Scodek was negligent in selecting Robinson as an independent contractor or in delegating to him the responsibility for delivery of the trailer to the site. Id. Finally, the Court held that the fact that Scodek’s president passed the disabled tractor-trailer hours before the accident and gave Robinson a credit card to assist him in having the tractor repaired “cannot serve to create a relationship warranting imposition of liability on Scodek for Robinson’s subsequent alleged negligent operation of the tractor trailer.” Id.
B. Defenses
1. Admission of Agency/Vicarious Liability
As noted above, when an employee acts within the scope of their employment, the employer is liable for any damages caused by the employee’s negligence under a theory of respondeat superior. As a result, no claim may proceed against the employer for negligent hiring or retention. Watson v. Strack, 5 A.D.3d 1067, 773 N.Y.S.2d 676 (4th Dep’t 2004); Karoon, supra.
2. Traditional Tort Defenses
Depending on the facts of a particular case, given the derivative nature of these theories, traditional tort defenses may apply including comparative fault, failure to mitigate damages, superseding and intervening cause, among others.
New York is a “pure” comparative negligence state. Accordingly, a plaintiff’s comparative negligence will reduce their recovery to the extent that they were comparatively negligent. For example, a plaintiff found to be 60 % at fault in causing an accident may still recover 40 % of their damages from the responsible tortfeasor.
Article 1601 of the Civil Practice Law and Rules brought about a significant limitation upon the rule of joint and several liability, holding that a defendant whose responsibility for an accident is less than 50% of the total fault, will be responsible only for its percentage share of non-economic damages. Unfortunately, injuries resulting from motor vehicle accidents are expressly excepted from this reform statute. Therefore, if a defendant involved in a motor vehicle accident is found 1% at fault, that defendant may be held responsible for the entire judgment. Of course, that defendant would have a right to contribution from the other defendants to the extent each was found at fault.
Seat Belt Defense: New York State has a mandatory seat belt law. Vehicle and Traffic Law §1229-C. One defense relevant to damages claims is the plaintiff’s non-use of available seat belts, which is strictly limited to the jury’s determination of damages and is not considered in resolving issues of liability. See, Spier v. Barker, 35 N.Y.2d 444, 450, 363 N.Y.S.2d 916 (1974); Van Nostrand v. Froehlich, 44 A.D.2d 54, 844 N.Y.S.2d 293 (2d Dep’t 2007).
C. Punitive Damages
1. As a general rule, evidence supporting a derivative negligence claim is not sufficient to support a claim for punitive damages. An exception to the general rule prohibiting a plaintiff from suing under respondeat superior and negligent hiring, supervision, and training exists if the injured plaintiff is seeking punitive damages from the employer based on alleged gross negligence in the hiring and retention of the employee. Bevilacqua v. City of Niagara Falls, 66 A.D.2d 988, 411 N.Y.S.2d 779 (4th Dep’t 1978).
In Watson, supra, the Fourth Department recognized that a cause of action for negligent hiring, supervision and retention does not lie, “where, as here, the employee is acting within the scope of his or her employment, thereby rendering the employer liable for damages caused by the employee’s negligence under the theory of respondeat superior.” Id., 5 A.D.3d at 1067-68. In Watson, undisputed evidence established that the defendant trucking company did not conduct an investigation into their employee’s driving record before they hired him, nor did they monitor his driving record while he was employed. At the time of the accident, the defendant driver had a pending charge for driving while intoxicated, and he was also driving illegally on a hardship license. Reversing the trial court’s order permitting plaintiff to amend the complaint to include a claim for punitive damages, the Fourth Department recognized that an exception to this general principle exists “where the injured plaintiff is seeking punitive damages from the employer based on alleged gross negligence in the hiring or retention of the employee.” Id., at 1068, quoting Karoon, supra, 241 A.D.2d at 324.
Punitive damages may be awarded when the defendant’s conduct “has a high degree of moral culpability”. Home Ins. Co. v. American Home Prods. Corp, 75 N.Y.2d 196, 203, 551 N.Y.S.2d 481 (1990). Such conduct “need not be intentional and is sufficient if it is so reckless or wantonly negligent as to be the equivalent of a conscious disregard of the rights of the others”. Rinaldo v. Mashayekhi, 185 A.D.2d 435, 436, 585 N.Y.S.2d 615 (3d Dep’t 1992). In Watson, the Fourth Department concluded that the employer’s alleged failure to conduct an investigation into their employee’s driving record before hiring him, or to monitor his driving record while he was employed, “does not constitute the requisite conduct for the imposition of punitive damages.” See, Coville v. Ryder Truck Rental, Inc., 30 A.D.3d 744, 817 N.Y.S.2d 179 (3d Dep’t 2006) (Employer’s hiring and retaining of truck driver did not rise to level of imposing punitive damages).
2. The appropriate standard of proof for punitive damages under New York Law.
One federal court recently commented that “New York Law on burden of proof and deciding punitive damages is unclear." Geressy v. Digital Equipment Corp., 950 F. Supp 519, 522 (E.D.N.Y. 1997). Another federal court has concluded, after a lengthy study of case precedent, that “federal and state court cases on the question are mired in morass of ambiguity.” Greenbaum v. Svenska Handelsbanken, N.Y., 979 F. Supp 973, 974-75 (S.D.N.Y. 1997). The First and Second Departments have held that the standard of proof is clear and convincing evidence. Orange and Rockland Utilities, Inc. v. Muggs Pub, Inc., 292 A.D.2d 580, 739 N.Y.S.2d 610 (2d Dep’t 2002); Camillo v. Geer, 185 A.D.2d 192, 587 N.Y.S.2d 306 (1st Dep’t 1992). Nevertheless, in 1920 the Court of Appeals held that the preponderance of evidence standard applied to punitive damages determinations. Corrigan v. Bobbs-Merrill Co., 228 N.Y. 58, 126 N.E. 260 (1920); accord, Matter of 7th Jud. Dist. Asbestos Litigation, 190 A.D.2d 1068, 1069, 593 N.Y.S.2d 685 (4th Dep’t 1993). Corrigan’s “preponderance of evidence” standard is considered to be the controlling precedent. See, Frechette v. Special Magazines., 285 A.D. 174, 176-77, 136 N.Y.S.2d 448 (3d Dep’t 1954).
North Carolina
Randall R. Adams Kevin M. Ceglowski Poyner & Spruill, LLP 130 S. Franklin St. Rocky Mount, NC 27804 Tel: (252) 972-7094 Fax: (252) 972-7045 Email: [email protected]
A. Employers' Liability for Employees' Actions Without Negligence on the Part of the Employer
1. Respondeat Superior ("Let the Master Answer")
a. What are the elements necessary to establish liability under a theory of Respondeat Superior?
An employer may be liable for the acts of an employee under a respondeat superior theory when the employee's act was:
1. expressly authorized by the employer; or 2. committed within the scope of and in furtherance of the employer's business; or 3. ratified by the employer
Medlin v. Bass, 398 S.E.2d 460 (N.C. 1990). If an employee injures someone while working for the employer and performing duties for the employer, that employer may be liable for any harm done under the respondeat superior theory of liability. If an action is not expressly authorized or ratified by the employer, an employer is only liable for an employee's actions if they are done in the scope of the employee's employment. "To be within the scope of employment, an employee, at the time of incident, must be acting in furtherance of the principal's business and for the purpose of accomplishing the duties of his employment." B.B. Walker Co. v. Burns Int'l Sec. Serv., 566 S.E.2d 172, 174 (N.C. Ct. App. 1993).
North Carolina does not recognize the doctrine of strict placard liability, or “statutory employment.” Instead, the North Carolina Courts have held that there is a rebuttable presumption of agency in which an employment relationship is presumed between the parties bound by the I.C.C. regulations, but that the carrier- lessee’s liability is ultimately determined by a common law “independent contractor” analysis. Parker v. Erixon, 473 S.E.2d 421 (N.C. Ct. App. 1996).
B. Elements of Proof for the Derivative Negligence Claims of Negligent Entrustment, Negligent Hiring, Negligent Retention, and Negligent Supervision
1. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
If a carrier allows a driver it knows is careless or reckless or should know is careless or reckless to operate one of its trucks, the carrier faces potential liability under a negligent entrustment theory. An employer will be liable for negligent entrustment when it entrusts a vehicle to a "person whom he knows, or by the exercise of due care should have known, to be an incompetent or reckless driver" who is "likely to cause injury to others in its use." Swicegood v. Cooper, 459 S.E.2d 206, 207 (N.C. 1995) (citing Heath v. Kirkman, 82 S.E.2d 104, 107 (N.C. 1954)).
2. Negligent Employment and Negligent Retention
a. What are the elements necessary to establish liability under a theory of negligent employment or negligent retention?
North Carolina recognizes a claim for negligent employment or negligent retention when a plaintiff proves:
1. a specific negligent act that caused his or her harm; 2. incompetency, by inherent unfitness or by previous specific acts of negligence from which incompetency may be inferred; 3. either actual notice to the employer of such incompetency, or constructive notice, by showing that the employer could have known the facts had he used ordinary care in oversight and supervision; and 4. that the incompetency caused the harm
See Medlin v. Bass, 398 S.E.2d at 462.
3. Negligent Supervision
a. North Carolina recognizes a cause of action for negligent supervision. The elements of this claim are very similar to those for negligent employment and negligent retention. To support a claim of negligent supervision against an employer, a plaintiff must prove:
1. the incompetent employee committed a tortious act resulting in injury to plaintiff; and 2. that prior to the act, the employer knew or had reason to know of the employee's incompetency
Smith v. Privette, 495 S.E.2d 395, 398 (N.C. Ct. App. 1998)
4. Example Case: Boyd v. L. G. De Witt Trucking Co.
In Boyd v. L. G. DeWitt Trucking Co., 405 S.E.2d 914 (N.C. Ct. App. 1991), the plaintiff's husband was killed when the vehicle he was driving was rear-ended by a tractor trailer. The plaintiff sued the driver, but also sued his employer under theories of respondeat superior and negligent entrustment. The driver had worked for the carrier on and off for 20 years, and was hired 11 times during that period. During those 20 years, the driver had 2 convictions for driving under the influence of alcohol, 3 convictions for reckless driving, and 6 speeding convictions.
The court held that the plaintiff had presented sufficient evidence from which a jury could find the driver was unsafe and the carrier either knew or should have known of the danger the driver presented to the rest of the driving public. The court also held that given the number and severity of the offenses the driver had committed, the evidence could also support a jury's finding that the carrier's negligent entrustment was willful or wanton. This ruling opened up the possibility of a punitive damages award against the carrier.
C. Defenses
1. Admission of Agency
In North Carolina, if an employer admits an agency relationship exists between it and the employee, the plaintiff may only proceed on a respondeat superior theory and may not pursue any derivative negligent entrustment claims. Negligent entrustment is applicable only when a plaintiff undertakes to impose liability on an owner not otherwise responsible for the conduct of the driver of the vehicle. Heath v. Kirkman, 82 S.E.2d 104, 107 (N.C. 1954). If a lawsuit is based on both respondeat superior and negligent entrustment, and the agency relationship is admitted, the employer's liability would rest on the doctrine of respondeat superior only, and the cause of action for negligent entrustment cannot be maintained. Id.
There is one limited exception to the rule of law that negligent entrustment is inapplicable when an agency relationship has been admitted. In Plummer v. Henry, 171 S.E.2d 330 (N.C. 1969), the court allowed an exception to the general rule where the issue of negligent entrustment was relevant in a claim for punitive damages based on the willful and wanton entrustment of a vehicle to a person likely to endanger the safety of others. Frugard v. Pritchard, 480 S.E.2d 636, 637 (N.C. Ct. App. 1993).
2. Traditional Tort Defenses
Carriers may be able to defend derivative negligence claims using the traditional defenses available in negligence cases, including:
1. contributory negligence 2. failure to mitigate damages 3. superseding or intervening causes
D. Punitive Damages
1. Are punitive damages available in derivative negligence actions?
Punitive damage awards in North Carolina are governed by statute. Punitive damages are not available for simple negligence. Under N.C. Gen. Stat. § 1D- 15(a), punitive damages may be awarded only when a claimant proves that a defendant is liable for compensatory damages and that one of three aggravating factors: fraud, malice, or willful or wanton conduct, was both present and related to the injury for which compensatory damages were awarded.
Punitive damages may not be awarded on the basis of vicarious liability – they may only be awarded upon a showing that the defendant carrier participated in the aggravating conduct or if its officers, directors or managers condoned the aggravating conduct.
Chapter 1D of the North Carolina General Statutes reinforces the common-law purpose behind punitive damages by providing that they are to be awarded "to punish a defendant for egregiously wrongful acts and to deter the defendant and others from committing similar wrongful acts." N.C. Gen. Stat. § 1D-1. N.C. Gen. Stat. § 1D-25 limits what plaintiffs may recover as punitive damages. It requires (1) that the trier of fact shall determine the amount of punitive damages separately from the amount of compensation for all other damages, and (2) that punitive damages awarded against a defendant shall not exceed three times the amount of compensatory damages or $250,000, whichever is greater. Id.
RALEIGH/538256v1
Ohio
Bradley A. Wright Marshal M. Pitchford Roetzel & Andress, LPA 222 South Main Street Akron, Ohio 44308 Tel: (330)376-2700 Fax: (330)376-4577 Email: [email protected] [email protected] A. RECOVERY FOR RESPONDEAT SUPERIOR, NEGLIGENT ENTRUSTMENT, AND NEGLIGENT RETENTION, HIRING AND SUPERVISION
In Ohio, courts recognize that there exist three separate and distinct theories of liability on which an employer may be held liable for the conduct of an employee. Stephens v. A-Able Rents Co. (8th Dist. 1995), 654 N.E.2d 1315, 1319. Such theories include respondeat superior, negligent entrustment, and negligent hiring. The same standard exists in Ohio for claims of negligent hiring as for negligent supervision and retention of an employee. See Snyder v. Guardian Automotive Products, Inc. (N.D. Ohio 2003), 288 F.Supp.2d 868. These standards as they apply to trucking cases in Ohio will be discussed in more detail below.
1. RESPONDEAT SUPERIOR
An employer may be vicariously liable for the torts of its employees under the doctrine of respondeat superior. Comer v. Risko (Ohio 2005), 833 N.E.2d 712. This theory imposes liability on the employer for the acts done by an employee in the course and scope of employment. If the employee has no liability, the employer cannot be held liable under this theory as any liability of the employer is derivative to that of the employee. See Callen v. Int’l Bhd. of Teamsters, Local 100 (1st Dist. 2001), 761 N.E.2d 51.
While this theory of recovery does apply in trucking cases, it has been expanded by law in the state of Ohio which places liability on a trucking carrier regardless of whether a negligent act was caused by the carrier’s actual employee. In Wyckoff Trucking v. Marsh Brothers Trucking Service, Inc., the Supreme Court of Ohio held that in tort causes of action involving leased vehicles of interstate motor carriers, primary liability shall be determined with regard to Federal Motor Carrier Safety Regulations (“FMCSA”) rather than common law doctrines of respondeat superior, master servant, independent contactor, and the like. Wyckoff (Ohio 1990), 569 N.E.2d 1049, at syllabus 1. The driver is viewed as a “statutory employee.” The relevant FMCSA regulations are contained in 49 CFR § 376.12 which states in Subsection (C):
any lease shall provide that the authorized carrier/lessee shall have exclusive possession, control and use of the equipment for the duration of the lease. The lease shall further provide that the authorized carrier/lessee shall assume complete responsibility for the operation of the equipment for the duration of the lease.
The Supreme Court has thus held that liability will attach to an interstate carrier/lessee if it is established that at the time the cause of action arose, (1) the lease of the vehicle was in effect and; (2) the vehicle displayed the carrier-lessee’s placard listing its FMCSA numbers. Wyckoff, supra, at syllabus 2. Should these facts exist, the FMCSA regulations creates an irrebuttable presumption of employment relationship between the carrier/lessee and the driver of the vehicle that displays the identification numbers of the carrier/lessee. Id. at syllabus 3. The irrebuttable presumption created by these regulations is referred to as the Doctrine of Statutory Employment. Id. at 265. Such liability attaches even if the driver embarks on an undertaking of his or her own by using the carrier/lessee’s FMCSA authority. Canal Insurance Co. v. Brogan (Franklin Cty. 1994), 639 N.E.2d 1219. It also applies whether or not the driver is the lessee’s employee. Wyckoff, supra, at 1051. Once liability is fixed on the statutory employer, it is the statutory employer who must then seek subrogation from other potentially responsible parties. Id. at 1053.
2. NEGLIGENT ENTRUSTMENT
Under a theory of negligent entrustment, the owner of a vehicle may be held liable for the injuries to a third person resulting from the operation of the vehicle by a person whom the owner knew or should have known was an inexperienced or incompetent driver. Huston v. Konieczny (Ohio 1990), 556 N.E.2d 505. To prove negligent entrustment, one must show that (1) the vehicle was entrusted to a person who is known or should have been known by the owner of the vehicle to be an incompetent driver; and, (2) that the negligent use of the vehicle, by that driver, caused the injury. Lee v. Sunnyside Honda (8th Dist. 1998), 716 N.E.2d 285.
In Ohio, a plaintiff has full right to pursue both respondeat superior and negligent entrustment theories of recovery. Clark v. Stewart (Ohio 1933), 185 N.E. 71. In trucking cases, a plaintiff has been allowed to bring a claim for negligent entrustment along with claims for liability based on respondeat superior even when the owner/defendant admitted that the truck driver was acting within the scope of his employment and that the owner was liable for the driver’s negligence. Nichols v. Coast Distrib. Sys. (9th Dist. 1993), 621 N.E.2d 738. What constitutes entrustment of a vehicle can be complicated. For example, a claim against an owner of a tractor-trailer for negligent entrustment was allowed when an unauthorized, unlicensed driver, who was allowed to “ride along” on a trip, was improperly allowed to operate the vehicle and was negligently involved in an accident even though the owner did not authorize the unlicensed driver’s use. Lakes v. Minor (12th Dist.) 620 N.E.2d 1015.
3. NEGLIGENT HIRING, RETENTION, AND SUPERVISION
Unlike vicarious liability under the theory of respondeat superior, an employer can be held independently liable under the theories of negligent hiring (Byrd v. Faber (Ohio 1991) 565 N.E.2d 584), negligent retention (Payton v. Receivables Outsourcing, Inc. (8th Dist. 2005) 840 N.E.2d 236), and negligent supervision (Lutz v. Chitwood (S.D. Ohio 2005) 337 B.R. 160). Under Ohio law, a party seeking to prevail on a claim for negligent hiring, supervision, or retention of an employee by an employer must show: (1) the existence of an employment relationship; (2) the employee’s incompetence; (3) the employer’s actual or constructive knowledge of such incompetence; (4) the employee’s act or omission causing plaintiff’s injuries; and, (5) the employer’s negligence in hiring, retaining, or supervising the employee as the proximate cause of the injuries. Snyder, supra.
In order to prevail on such a claim, the plaintiff must prove the basic elements of negligence against the employer, i.e. duty, breach, proximate cause, and damages. Abrams v. Worthington (10th Dist. 2006), 861 N.E.2d 920. In general, an employer has a duty to prevent foreseeable injury to others by exercising reasonable care to avoid employing an incompetent employee. Id. In addition, a plaintiff must show that the employee’s act was reasonably foreseeable. Doe v. Archdiocese of Cincinnati (1st Dist. 2006) 855 N.E.2d 894. An act is considered foreseeable if the employer knew or should have known of the employee's propensity to engage in similar criminal, tortious, or dangerous conduct. Id. This is a difficult burden to prove in most instances and the failure to provide strong evidence in support will likely lead to the dismissal of such claims. See Smith v. Spring Hill Integrated Logistics Management, Inc (N.D. Ohio 2005), 2005 WL 2469689.
B. PUNITIVE DAMAGES
Under Ohio Revised Code § 2315.21 (C)(1), punitive damages are allowed when “[t]he actions or omissions of [a] defendant demonstrate malice or aggravated or egregious fraud, or that defendant as principal or master knowingly authorized, participated in, or ratified actions or omissions of an agent or servant that so demonstrate.” In situations involving vicarious liability, such as those involving employer/employee relationships, punitive damages are not awarded against the principal unless the principal or master authorized, participated in, or ratified the actions or omissions of the agent or servant that demonstrate malice. Malone v. Courtyard of Marriott L.P. (Ohio 1996), 659 N.E.2d 1242.
As to punitive damages, the employer’s ratification of an employee’s act is presumed if the act was performed within the scope of employment. On the other hand, ratification must be proven if the act was outside the scope of employment.
Pursuant to R.C. 2315.21(B)(1), an employer is not liable for punitive damages unless the employer authorized, participated in, or ratified the actions of the employee. In general, an employer authorizes acts committed within the scope of employment, either expressly or impliedly. When an employee is acting within the scope of employment, the doctrine of respondeat superior applies, and the plaintiff need not prove ratification to hold the employer liable for punitive damages. But if an employee’s act is outside the scope of employment, the plaintiff must demonstrate that the employer ratified the willful and malicious conduct of the employee. Generally, the determination of whether an employee has acted within the scope of his employment is a question of fact to be decided by the jury.
Siuda v. Howard, 1st Dist. Nos. C-000656, C-000687, 2002 WL 946188, 2002-Ohio-2292, at *12. Therefore, care must be taken to defend against punitive damages on the grounds that the act for which the punitive damages are sought was not committed within the scope of employment in order not to waive the requirement for proof of ratification. In Ohio, ratification has been found and punitive damages recovered for the acts of a trucking employee, even though performed outside of the scope of employment, when the employer was determined to have negligently hired or negligently retained the employee. Columbus Ry., Power & Light Co. v. Harrison (Ohio 1924), 143 N.E. 32.
Oklahoma
Scott A Law PIERCE COUCH HENDRICKSON BAYSINGER & GREEN, L.L.P. 1109 N. Francis Oklahoma City, Oklahoma Tel: (405) 235-1611 Fax: (405) 235-2904 Email: [email protected]
A. Elements of Proof for the Derivative Negligence Claims of Negligent Entrustment, Hiring/Retention and Supervision
In Oklahoma, a trucking company may be held liable for the acts of employee drivers under the doctrine of respondeat superior (imputed liability), as well as for the company’s own acts in the negligent hiring, supervision and retention of its employee drivers and/or the negligent entrustment of a vehicle to an employee driver (direct liability). Although plaintiffs often assert both types of claims against a trucking company in Oklahoma, there is no additional liability on the trucking company when liability is admitted, stipulated or otherwise established on the basis of respondeat superior. Jordan v. Cates, 1997 OK 9, 935 P.2d 289.
1. Respondeat Superior (Latin, “let the master answer”.)
a. What are the elements necessary to establish liability under a theory of Respondeat Superior?
In Oklahoma, a trucking may be sued for its employee’ negligence, even if the employee is not actually named in the lawsuit. However, in order for a plaintiff to succeed under this theory of employer negligence, the employee must be acting within the course and scope of their employment when the wrongful acts were committed. The burden of proving this element is squarely upon the plaintiff. Hooper By and Through Hooper v. Clements Food Co., 1985 OK 6, 694 P.2d 943, 944.
Generally, a trucking company will not be responsible for the intentional or willful acts of its employee drivers, unless the employee driver was acting within the scope of their employment and the act complained of was committed as a means of carrying out the job assigned to the employee by his employer. Allison v. Gilmore, Gardner & Kirk, Inc., 1960 OK 48, 350 P.2d 287; and Mistletoe Express Service, Inc. v. Culp, 1959 OK 250, 353 P.2d 9. However, The Oklahoma Supreme Court has recently expanded this theory by holding that an employer may be held liable for the intentional and willful acts of its employees when the acts are fairly and naturally incident to the employer’s business, and are done while the servant is engaged in doing his employer’s business, with a view toward furthering his employer’s interests or if the acts resulted from some impulse or emotion which naturally grew out of or was incident to the employee’s attempt to perform his employer’s business. The Oklahoma Supreme Court’s rationale was that the employee is doing a “rightful thing” (the business of their employer) even though the employee may have done so in a “wrongful manner”. Baker v. St. Francis Hospital, 2005 OK 36, ____ p.3d ___; Rodebush By and Through Rodebush v. Oklahoma Nursing Homes, Ltd., 1993 OK 160, 867 P.2d 1241.
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
To support an actionable claim for negligent entrustment of a vehicle, the plaintiff must show that: a person who owns or has possession and control of a vehicle allowed another driver to operate the vehicle; the person knew or reasonably should have known that the other driver was careless, reckless and incompetent; and an injury was caused by the careless and reckless driving of the automobile. The question of negligent entrustment is one of fact for the jury and may be proven by circumstantial as well as positive or direct evidence. Shoemake v. Stich, 1975 OK 55, ¶ 13, 534 P.2d 667; Berg v. Bryant, 1956 OK 336, ¶ 5, 305 P.2d 517; Coker v. Moose, 1937 OK 67, ¶ 9, 68 P.2d 504; and Waddle v. Stafford, 1924 OK 309, ¶ ____, 230 P. 855. See also, National Trailer Convoy, Inc. v. Saul, 1962 OK 181, ¶ 10, 375 P.2d 922; and Greenland v. Gilliam, 1952 OK 72, ¶ 11, 241 P.2d 384.
It is the negligence of the driver that provides the causal connection necessary to establish liability in tort between the negligence of the entrusting owner and injuries sustained by the plaintiff. If an accident occurs in which the driver is not negligent, there is no causal connection between the owner's precedent negligence and the injury itself. It is the combined negligence of the owner and operator which fastens liability upon the owner. Otherwise, the plaintiff's recovery would rest on no stronger basis than the “but for” doctrine. Strictly speaking, the liability is not derivative, rather it is dependent because the effect is to require an affirmative finding of the driver’s negligence. Otherwise dependent liability of the owner cannot be imposed in the face of exoneration of the defendant whose negligent acts are claimed to have been the immediate cause of plaintiff's injury. Clark v. Turner, 2004 OK CIV APP 69, ¶ 36, 99 P.3d 736; and Anthony v. Covington, 1940 OK 59, 187 Okla. 27, 100 P.2d 461.
3. Negligent Hiring/Supervision/Retention
a. What are the elements necessary to establish liability under a theory of negligent hiring/supervision/retention?
In Oklahoma, employers may be held liable for negligence in hiring, supervising or retaining an employee. Jordan v. Cates, 1997 OK 9, ¶ 12, 935 P.2d 289; Dayton Hudson Corp. v. American Mut. Liability Ins. Co., 1980 OK 193, ¶ 17, 621 P.2d 1155,16 A.L.R.4th 1; Mistletoe Express Serv., Inc. v. Culp, 1960 OK ---- , ¶ ----, 353 P.2d 9. In such instances, recovery is sought for the employer's negligence. The claim is based on an employee's harm to a third party through the course and scope of their employment. An employer is found liable, if at the critical time of the tortious incident, the employer had reason to believe that the person would create an undue risk of harm to others. Employers are held liable for their prior knowledge of the servant's propensity to commit the very harm for which damages are sought. There is no distinction between causes of action for or the necessary elements of negligent hiring, supervision and/or retention, except as to the critical time of the tortuous incident relative to the prior knowledge of the employer.
B. Defenses
1. Admission of Agency
Oklahoma has adopted the majority view that once an employer has admitted or stipulated to the agency relationship between it and the employee, plaintiff will not be allowed to proceed on any other theory of derivative or dependent liability. The rationale for this view is that claims for negligent hiring, supervision or retention of employees would not afford plaintiff any additional liability against the employer. Jordan v. Cates, 1997 OK 9, 935 P.2d 289.
2. Traditional Tort Defenses
Depending on the facts of a particular case, given the derivative nature of these theories, traditional tort defenses may also apply such as comparative fault, failure to mitigate damages, superseding and intervening cause, etc.
C. Punitive Damages
1. Is evidence supporting a derivative negligence claim permissible to prove an assertion of punitive damages?
While the Oklahoma Supreme Court has held that admitting agency prevents a plaintiff from proceeding on any other derivative or dependent liability theory, it specifically found that such evidence was relevant to the issue of punitive damages under a tort theory of liability. Jordan v. Cates, 1997 OK 9, 935 P.2d 289. However, to award punitive damages, the jury must find by clear and convincing evidence that the defendant has been guilty of reckless disregard for the rights of others or has acted intentionally and with malice towards others. 23 O.S. § 9.1. In an action for the breach of an obligation not arising from contract, the jury may award punitive damages for the sake of example and by way of punishing the defendant based upon the following factors: seriousness of the hazard to the public arising from the defendant’s misconduct; profitability of the misconduct to defendant; duration of misconduct and any concealment of it; degree of defendant’s awareness of the hazard and its excessiveness; attitude and conduct of the defendant upon discovery of the misconduct or hazard; and financial condition of the defendant. Id.
Oregon
Rodney L. Umberger, Jr. Marc M. Carlton WILLIAMS KASTNER 888 SW Fifth Avenue, Suite 600 Portland, OR 97204-2025 Phone: (503) 228-7967 Fax: (503) 222-7261 Email: [email protected] Email: [email protected] A. Derivative Negligence Claims
In Oregon, employers are generally vicariously liable for the negligent acts of their employees committed while the employee is acting within the scope of their employment. Stanfield v. Laccoarce, 284 Or 651, 654, 588 P2d 1271 (1978). The employee does not need to be named as a defendant to hold the employer vicariously liable. Vendrell v. School District No. 26C, 226 Or 263, 276-277, 360 P2d 282 (1961). However, if the employee is named as a defendant, then the employer is vicariously liable only if the jury renders a verdict against the employee as well as the employer. Eckleberry v. Kaiser Foundation, 226 Or 616, 628, 359 P2d 1090 (1961).
1. Respondeat Superior
In order to establish vicarious liability, a plaintiff must provide that (1) the claimed negligent party was in fact employed by the employer, and (2) the party was acting within the course and scope of his or her employment. Stanfield, 284 Or at 654. The first step focuses on control or, more appropriately, the employer’s right to control the alleged employee. Kowaleski v. Kowaleski, 235 Or 454, 460, 385 P2d 611 (1963).
The second step in the analysis consists of a three-part test. The plaintiff must show the following:
a. The act in question is of a kind the employee was hired to perform;
b. The act occurred substantially within the authorized limits of time and space; and
c. The employee was motivated, at least in part, to serve the employer.
Stanfield, 284 Or at 655.
In Oregon, the question of whether the employee was serving the employer or was on either a “frolic or detour” is a question of fact for the jury. The question of a master’s liability turns on whether the deviation is minor or substantial. See Ryan v. Western Pac. Ins. Co., 242 Or 84, 87, 408 P2d 84 (1965).
Additionally, an employee is generally not within the scope of employment when traveling to and from work. Heide/Parker v. T.C.I. Incorporated, 264 Or 535, 539, 506 P2d 486 (1973) (employer not vicariously liable for injuries employee sustained in auto accident on the way home from work; employee was not furthering employer’s business at the time of the accident and employer did not control her manner of travel). That said, an employee may be determined to be within the scope of employment if one of more of the following facts are present:
a. The employer has a right to dictate the manner of travel, the route taken, or the method of travel;
b. The employer paid the employee “extra compensation to cover the cost of transportation;” or
c. The employee has been compensated for the period of time when traveling to and from work.
See Heide/Parker, 264 Or at 539.
2. Negligent Entrustment
In Oregon, one who supplies a vehicle to another whom the supplier knows, or has reason to know, because of their youth, inexperience, or otherwise will use the vehicle in a manner involving unreasonable risk of physical harm to himself and others, is subject to liability for physical harm resulting to them. Emerson v. Western Photo-Mount Co., 267 Or 562, 566, 518 P2d 171 (1974). The liability of an owner knowingly entrusting a vehicle to an incompetent driver extends to all injuries naturally and probably resulting from the driver’s recklessness or incompetency. However, the owner will only be held liable if the incompetency, recklessness, or incapacity of the person to who the vehicle was entrusted is the proximate cause of the plaintiff’s injuries. Id.
To prove a negligent entrustment claim, a plaintiff must show (1) there was an entrustment, and (2) that the entrustment was negligent. Matthews v. Federated Service Ins. Co., 122 Or App 124, 133, 857 P2d 852 (1993). To prove the entrustment was negligent, a plaintiff must show that entrusting the vehicle to the driver was (1) unreasonable under the circumstances, (2) that it caused harm to plaintiff, and (3) that the risk of harm to plaintiff (or the class of person who whom he or she belongs) was reasonably foreseeable. Id. at 133-34.
3. Negligent Hiring/Retention
An employer whose employees come into contact with members of the public during their employment has a duty to exercise reasonable care in the selection and retention of its employees. Chesterman v. Barmon, 82 Or App 1, 4, 727 P2d 130 (1987), aff’d and remanded, 305 Or 439 (1988). Liability is assessed for negligently placing an employee with known dangerous propensities, or dangerous propensities which could have been discovered by a reasonable investigation, in a position where it is foreseeable that he could injure another in the course of the employee’s work. Id. The duty to use reasonable care in hiring and retaining employees arises because it is foreseeable that the employee, in carrying out his employment, may pose an unreasonable risk of injuries to others. Id.
To prove a claim for negligent hiring or negligent retention, a plaintiff must show (1) the employer owed a duty to the plaintiff, (2) the employer breached that duty, and (3) that the breach resulted in injuries to the plaintiff. Brennan v. City of Eugene, 285 Or 401, 405, 591 P2d 719 (1979). In order to establish that the employer owed a duty, the plaintiff must show that it was reasonably foreseeable that they would come into contact with the employee as a result of his employment. Chesterman, 82 Or App at 5.
4. Negligent Supervision
Under Oregon law, an employer has a duty to use reasonable care in supervising employees. Chesterman, 82 Or App at 4. An employer violates this duty if it continues to employ an employee with known dangerous propensities in a position where it is foreseeable that the employee will harm the plaintiff. Id.
5. Independent Contractors
The general rule in Oregon is that one who hires an independent contractor is not vicariously liable for the torts of the independent contractor. Buckel v. Nunn, 131 Or App 121, 125, 883 P2d 878 (1994). The difference between an independent contractor and an employee has been stated as follows:
An independent contractor, as distinguished from a mere employee, is one who, carrying on an independent business, contracts to do a piece of work according to his own methods, and without being subject to the control of his employer as to the means by which the result is to be accomplished, but only as to the result of the work.
Soderback v. Townsend, 57 Or App 366, 369, 644 P2d 640 (1982), citing Oregon Fisheries Co. v. Elmore Packing Co., 69 Or 340, 345, 138 P 862 (1914).
A person who employs an independent contractor directs the contractor to accomplish a result and, in that sense, exercises some control over the contractor, but that control alone will not convert the independent contractor into an employee. For an employer to be vicariously liable for the torts of an independent contractor, he must have the right to control not only the result, but also the manner and means of accomplishing the result. Soderback, 57 Or App at 369. Four factors are considered in applying the “right to control” test: (1) direct evidence of the right to, or exercise of, control, (2) the furnishing of tools and equipment, (3) the method of payment, and (4) the right to fire. Kaiel v. Cultural Homestay Institute, 129 Or App 471, 475, 879 P2d 1319 (1994).
A specific agreement that a party will perform work as an independent contractor rather than as an employee is of some significance, but is far from determinative. Henn v. SAIF, 60 Or App 587, 592, 654 P2d 1129 (1982). If the actual conduct of the parties is inconsistent with their agreement, the conduct controls. Jenkins v. AAA Heating, 245 Or 382, 385, 421 P2d 971 (1966).
At least one Oregon court has held that a trucking company’s right to direct a driver’s “pick-ups and deliveries is enough to establish that [it] had a right of control” over the driver. See Forest Industries Ins. Exchange v. U.S. Fidelity and Guaranty Co., 80 Or App 724, 730, 723 P2d 381 (1986).
B. Defenses
1. Attacking Respondeat Superior/Vicarious Liability
If an employer’s liability to a plaintiff rests solely upon the theory of vicarious liability, and the employee is found to have committed no tort against the plaintiff, then no liability may be asserted against the employer. Eckleberry, 226 at 628. Thus, where both the employer and employee are joined as defendants and the jury exonerates the employee, it may not lawfully render a judgment against the employer. Id.
However, if a plaintiff has asserted an independent claim against the employer for negligence or some other breach of duty, the dismissal of a claim against its employee or agent will not have any effect on those claims.
2. Traditional Tort Defenses
a. Assumption of the Risk
The defense of “assumption of the risk” has been abolished by statute in Oregon. See ORS 31.620(2). As a result, defendants are prevented from asserting implied assumption of the risk as an affirmative defense that might act as a complete bar to recovery. Kirby v. Sonville, 286 Or 339, 344, 594 P2d 818 (1979). Instead, the assumption of the risk argument is placed in the comparative fault equation. Thus, if a defendant can establish that a plaintiff “voluntarily and unreasonably” undertook a risk or danger created by the defendant’s conduct, the jury must consider such conduct in comparison to the defendant’s negligent acts. Blair v. Mt. Hood Meadows Development Corp., 291 Or 293, 301, 630 P2d 827, modified, 291 Or 703 (1981).
b. Contributory Negligence
Oregon is a “51%” state. That is, a plaintiff may recover so long as the fault attributed to them is not greater than the combined fault of the defendants, third-party defendants, and those with whom the plaintiff has settled. ORS 31.600. Additionally, in most cases, the liability of each defendant is several only, not joint and several. ORS 31.610(1).
(i) Plaintiff’s Intoxication
Under ORS 31.715(1), if a plaintiff has a blood alcohol content of 0.08% or more at the time of an accident and is operating a motor vehicle, the plaintiff is not entitled to recover noneconomic damages “in any action for injury or death arising out of the [accident].”
(ii) Failure to Use Seatbelts
A defendant may offer evidence of the “nonuse of a safety belt or harness” to mitigate the plaintiff’s claimed damages. However, the mitigation is capped at 5% of the amount to which the plaintiff would otherwise be entitled. ORS 31.760.
(iii) Uninsured Plaintiff
If a plaintiff does not possess motor vehicle insurance, the plaintiff is generally not entitled to recover noneconomic damages in any action for injury or death arising out of the accident. ORS 31.715(1). However, that limitation does not apply if the plaintiff was insured within 180 days before the accident, and the plaintiff had insurance continuously for a one-year period immediately preceding the date on which the coverage lapsed. ORS 31.715(6).
3. Punitive Damages
Punitive damages are recoverable in Oregon where a defendant is proven by clear and convincing evidence to have “acted with malice or has shown a reckless and outrageous indifference to a highly unreasonable risk of harm and has acted with a conscious indifference to the health, safety and welfare of others.” ORS 31.730.
A claim for punitive damages may not be alleged in the initial complaint. ORS 31.725(1). To allege a claim for punitive damages, the plaintiff must file a motion to amend the complaint, together with affidavits and documents that support the claim. ORS 31.725(2). The supporting documentation is required to be properly authenticated admissible evidence. ORS 31.725(3). However, if the plaintiff submits any admissible evidence tending to show “malice” or “outrageous indifference,” the court must allow the amendment. Bolt v. Influence, Inc., 333 Or 572, 43 P.3d 425 (2002) (when reviewing a motion to amend to add claim for punitive damages, the trial court reviews the motion under the well-established “no evidence” standard or, conversely, the “some evidence” standard).
Under Oregon’s tort reform, the plaintiff is only entitled to recover 40% of any punitive damages award. ORS 31.735(1). The remaining 60% must be paid to the Oregon Department of Justice’s Criminal Injuries Compensation Account. ORS 31.735(1)(b). Of the 40% distributed to the plaintiff, no more than half of that amount (or 20% of the entire award) may be paid to the plaintiff’s attorney. ORS 31.735(1)(a).
4. Statutory Cap on Wrongful Death Damages
In Oregon, noneconomic damages in a wrongful death action are capped at $500,000. ORS 31.710(1); Greist v. Phillips, 322 Or 281, 288, 906 P2d 789 (1995). The cap remains at $500,000 regardless of the number of beneficiaries. Greist, 322 Or at 289.
Pennsylvania
Patrick J. Sweeney Vincent D. Monzo Sweeney & Sheehan 1515 Market Street Suite 1900 Philadelphia, PA 19102 Tel: (215) 563-9811 Fax: (215) 557-0999 Email: [email protected] [email protected]
A. Elements of Proof for the Derivative Negligence Claims of Negligent Entrustment, Hiring/Retention and Supervision
The Pennsylvania Courts have adopted the Restatement (Second) of Torts and the Restatement (Second) of Agency along with common law theories to invoke derivative liability on an employer for the acts of its employees. The relevant portions of the Restatements impose on an employer the duty to exercise reasonable care in selecting, supervising and controlling employees.
1. Respondeat Superior
Under the doctrine of respondeat superior, recovery is sought on the basis of vicarious liability. An employer is vicariously liable for the wrongful act of an employee if the act was committed during the course of, and within the scope of, his employment. Brezenski v. World Truck Transfer, Inc., et al., 755 A.2d 36, 39 (Pa. Super. 2000). The conduct of an employee is considered “within the scope of employment” for purposes of vicarious liability if it is of a kind and nature that the employee is employed to perform, it occurs substantially with the authorized time and space limits, it is actuated, at least in part, by a purpose to serve the employer, if force is intentionally used by the employee against another and the use of force is not unexpected by the employer. This liability may extend even to intentional or criminal acts committed by the employee; however if the act is done for a personal reason, or in an outrageous manner, it will not be considered as being done within the scope of employment. Id.
The presence of a company’s name, placard or logo on a commercial vehicle raises the rebuttable presumption that the same company is the owner of the vehicle. See Caldwell v. Wilson Freight Forwarding Company, 322 F.Supp. 43 (W.D. Pa. 1971). It also raises the rebuttable presumption that the driver of the vehicle is the agent or servant of that company and is operating the vehicle for purposes of that company’s business. Dunkel v. Vogt, 47 A.2d 195 (Pa. 1946). The presumption alone is enough to take the case to the jury “unless the evidence to the contrary is clear, positive, credible, uncontradicted and so indisputable in weight and amount it must be set aside as a matter of law.” Hartig v. American Ice Co., 137 A.867 (Pa. 1927). If evidence is introduced in the plaintiff’s case that makes it clear that the operator of the vehicle was not operating the vehicle while in the scope of his employment or on business for the defendant owner, the presumption if wholly lost. Dunkel, supra. However, if the evidence to rebut the presumption is not raised until the defendant’s case, the issue is one of fact which is decided by the jury. Lindenmuth v. Steffy, 98 A.2d 242 (Pa. Super. 1953). When a commercial vehicle has the name, logo or placard of more than one company, each may be held liable for the conduct of the driver. Franceschino v. Mack, 102 A.2d 217 (Pa. Super. 1954). In such a case, two masters may have some control over one servant, rendering both of them liable. Id. It is up to the jury to determine, based on the evidence, who had control over the driver and to what extend. See Id.
The basic inquiry is whether such a person is subject to the alleged employer’s control or right to control with respect to his physical conduct in the performance of the services for which he was engaged. Wilson v. IESI N.Y. Corp., 444 F.Supp.2nd 298, 313 (M.D. Pa. 2006). Although the right to control the manner in which work is to be done is the touchstone of the inquiry, the other factors which are relevant to determining whether a person was an employee or an independent contractor include: whether the person has responsibility for results only, the terms of the agreement between the parties, the nature of the work to be done, the skill required for performance, whether the person employed is engaged in a distinct occupation or business, which parties supply the tools, whether payment is by time or by the job, whether the work is part of the regular business of the employer, and the right to terminate employment at any time.
2. Negligent Entrustment
The tort of negligent entrustment exists when an actor permits another person to use a thing which is under the control of the actor, if that actor knows or should know that the other person intends or is likely to use the thing in such a manner as to create unreasonable risk of harm to others. Ferry v. Fisher, 709 A.2d 399 (Pa. Super. 1998). Liability is imposed on the actor because of his own actions in relation to the instrumentality under his control. Id.; citing Christianson v. Silfies, 667 A.2d 396, 446 Pa. Super. 464 (1995). Furthermore, the entrustor’s liability is not dependent on, derivative of, or imputed from the entrustee’s actual liability for damages. Id.
3. Negligent Supervision
A person conducting an activity through servants or other agents is subject to liability for harm resulting from his conduct if he is negligent or reckless:
(a) in giving improper or ambiguous orders or in failing to maker proper regulations; or (b) in the employment of improper person or instrumentalities in work involving risk of harm to others; or (c) in the supervision of the activity; or (d) in permitting, or failing to prevent, negligent or other tortuous conduct by person, whether or not his servants or agents, upon premises or with instrumentalities under his control.
The determination of whether a person was acting within the scope of his employment is typically a question for the jury. Costa v. Roxborough Memorial Hospital, 708 A.2d 490, 493 (Pa. 1998). Where, however, the employee commits an act encompassing the use of force which is excessive and so dangerous as to be totally without responsibility or reason, the employer is not responsible as a matter of law. Id. Further, Pennsylvania courts have held that an assault committed by an employee for personal reasons or in an outrageous manner is not actuated by an intent to perform the business of the employer and, as such, is not within the scope of employment. Id.
4. Negligent Retention
The Supreme Court of Pennsylvania has adopted the Restatement (Second) of Torts § 317 to guide the lower courts in their evaluation of negligent retention claims. Schofield v. Univ. of Pa., 894 F.Supp. 194, 196 (E.D. Pa. 1995). This section provides that a master is under a duty to exercise reasonable care so to control his servant which is acting outside the scope of his employment as to prevent him from intentionally harming others or form so conducting himself as to create an unreasonable risk of bodily harm to them, if
(a) the servant (i) is upon the premises in possession of the master or upon which the servant is privileged to enter only as his servant, or (ii) is using a chattel of the master, and
(b) the master (i) knows or has reason to know that he has the ability to control his servant, and (ii) knows or should have reason to know of the necessity and opportunity for exercising such control.
An employer may subject himself to liability under this Section by retaining in his employment servants who, to his knowledge, are in the habit of misconducting themselves in a manner dangerous to others.
Among the essential elements of a negligent retention claim is proof that a more thorough investigation by the employer would have revealed that the employee had a history of harassing conduct. Sabo v. Lifequest, Inc., 1996 WL 583169, *4 (E.D. Pa. 1996). In other words, the inquiry focuses on whether the harm was reasonably foreseeable by the employer. Schofield at 196.
B. Defenses
Pennsylvania courts have also allowed traditional tort defenses such as comparative negligence, failure to mitigate damages, superseding and intervening cause(s), etc. in regards to derivative negligence cases.
C. Punitive Damages
In Pennsylvania, punitive damages are proper only of an actor’s conduct was malicious, wanton, willful, oppressive, or exhibited a reckless indifference to the rights of others. SHV Coal, Inc. v. Continental Grain Co., 526 Pa. 489, 493 (1989); Hoffman v. Memorial Osteopathic Hosp., 342 Pa. Super. 375, 383, 492 A.2d 1382 (1985). This determination lies within the sound discretion of the fact- finder and will not be disturbed on appeal unless there was an abuse of discretion. Id.
It is axiomatic, however, that a claim for punitive damages arises out of the underlying cause of action and, therefore, absent a viable cause of action, an independent claim for damages cannot stand. Kirkbride v. Lisbon, 521 Pa. 97, 101 (1989). A reasonable relationship must exist between the nature of the cause of action underlying the compensatory award and the decision to grant punitive damages. There is no set formula in Pennsylvania for calculating punitive damages. Dillow v. Myers, 916 A.2d 698, 702 (Pa. Super. 2007).
South Carolina
Mark S. Barrow, Esq. E. Wayne Ridgeway, Jr. Sweeny, Wingate and Barrow 1515 Lady Street Columbia, SC 29211 803-256-2233 [email protected] and [email protected]
Negligent Entrustment in South Carolina
Generally speaking, negligent entrustment is “[t]he act of leaving a dangerous article (such as a gun or car) with a person who the lender knows, or should know, is likely to use it in an unreasonably risky manner.” Black’s Law Dictionary, 7th Edition, P. 847. It is important to note that the elements of this cause of action in South Carolina are not nearly as broad as this general definition. They are narrowly tailored to deal with entrustment of a vehicle to an individual who is likely to use it in an “unreasonably risky manner.” Id.
Elements of Negligent Entrustment in South Carolina
The elements of negligent entrustment in South Carolina have been clearly defined as:
1) Knowledge of or knowledge imputable to the owner that the driver was either addicted to intoxicants or had the habit of drinking; 2) The owner knew or had imputable knowledge that the driver was likely to drive while intoxicated; and 3) Under these circumstances, the entrustment of a vehicle by the owner to such a driver.
Jackson v. Price, 288 S.C. 377, 342 S.E.2d 628 (Ct. App. 1986). These elements were set forth by the South Carolina Court of Appeals in 1986.
Development of Negligent Entrustment in South Carolina
Although recently challenged, the South Carolina Supreme Court declined to adopt the alternative methods of proving negligent entrustment as found in the Restatement (Second) of Torts, §§ 308 and 390.1 Gadson v. ECO Services, 374 S.C. 171, 648 S.E.2d 585 (S.C. 2007). Instead, they affirmed the elements listed above from Jackson v. Price. In his concurring opinion, Justice Pleicones said he believed the Court should adopt the alternative methods of proof because he “fear[ed] that our current formulation would not admit (sic) liability where a person permitted an individual to drive an automobile knowing that the driver was intoxicated, but where there was no
1 Section 308 provides: “It is negligence to permit a third person to use a thing or to engage in an activity which is under the control of the actor, if the actor knows or should know that such a person intends or is likely to use the thing or to conduct himself in the activity in such a manner as to create an unreasonable risk of harm to others.”
Section 390 provides: “One who supplies directly or though a third persona a chattel for the sue of another whom the supplier knows or has reason to know to be likely because of his youth, inexperience, or otherwise, to use it in a manner involving unreasonable risk of physical harm to himself and others whom the supplier should expect to share in or be endangered by its use, is subject to liability for physical harm resulting to them.” evidence of the supplier knew the driver was a habitual drinker or addicted to alcohol.” Id. At 589.
Negligent Hiring / Retention
The employer has a responsibility to exercise reasonable care in hiring its employees. Be careful though. Employers must take precaution to avoid violating privacy and other rights of applicants and employees. Employers should obtain applicant’s written consent to run any background checks involving criminal records, driving records, debt or credit history, etc. Design the employment application to obtain as much legally permissible information as possible. Application should include authorization permitting the employer to verify all information provided and investigate gaps in employment history. It should also require the applicant to certify that the information provided by him or her truthful and complete, and that the employer can decline to hire or terminate the applicant, if the applicant provides incomplete or misleading information.
Negligent Retention on the other hand, involves the reasonable care an employer must exercise after an applicant is hired and becomes an employee. While South Carolina does not have a specific case that applies to the transportation context, the South Carolina case on point is Doe v. ATC, Inc. 367 S.C. 199, 624 S.E.2d 447. Doe involved the inappropriate touching by an ATC employee of a disabled adult female who rode the Medicaid bus to Greenville hospital. Prior to the incident involving Doe, the ATC employee, Calvin Murray, had been involved in an isolated incident where he grabbed a fellow employee, Tycie Moss, and made comments that were sexual in nature to her. Moss reported the incident to her supervisor, Hattie Wright, but told her not to write the incident up because she didn’t want it to “blow up”. Moss refused to file a complaint. Murray gave his side and said the incident was not as interpreted.
Doe’s theory of liability was that ATC was negligent in its retention of Murray by not firing him following the single incident with Moss. The SC Court of Appeals presumed the State Supreme Court would recognize negligent retention and found that the cases should turn on two fundamental elements… knowledge of the employee AND foreseeability of harm to third parties. The court found that the plaintiff must demonstrate that the employee had “dangerous proclivities”. They also found that a single isolated prior incident of misconduct could support a negligent retention claim, if the prior misconduct had a “sufficient nexus to the ultimate harm.” However, in the Doe case they found that the single incident did not give rise to negligent retention liability.
Negligent Supervision
An employer may have a legal duty to use due care in supervising an employee as a result of a contractual relationship with the employee. Degenhart v. Knights of Columbus, 420 S.E. 2d 495 (1992). This duty sounds in tort, not in contract. This ensuing duty is limited to the employee's actions undertaken in his capacity as an agent for the employer. Id.
Clearly, an employer has a responsibility to exercise reasonable care in its supervision of employees. Moore v. Berkley County School District, 486 S.E. 2d 9 (S.C. A. App. 1997). However, in Degenhart, the Supreme Court held that an employer is under a duty in some circumstances to exercise reasonable care to control an employee acting outside the scope of employment. Specifically, liability for negligent supervision can be found if an employee intentionally harms another person when: (1) the employee is on the employers property or is using the employers personal property; (2) the employer knows or has reason to know that it has the ability to control the employee; and (3) the employer knows or should know of the necessity and opportunity for exercising such control. Berkley, 486 S.E. 2d 9 (citing Degenhart420 S.E. 2d 495 (1992)).
Moreover, a government entity’s liability is limited by the Tort Claims Act, and a plaintiff must show that the government was grossly negligent in its conduct.
Respondeat Superior
One must be clear that liability based on Respondeat Superior is a faultless ground for holding the third party (employer) liable. Unlike other causes of action like negligent entrustment, negligent supervision or negligent hiring/retention, holding a employer liable in an action based on Respondeat Superior does not require a showing of tortuous behavior on the part of the employer. The employer need not cause or contribute in any way to the underlying tort. In such a case liability flows through to the employer merely because of the relationship between the tortfeasor and the employer. Also, in such a case, the tortfeasor remains liable for their own tort and the tortfeasor and employer may be held jointly and severally liable for damages.
Basis for Liability
There are three major areas in the basic doctrine of Respondeat Superior in South Carolina.
1. An employer is liable for the tort of his servant if the tort is committed within the scope of the servant’s employment. South Carolina courts often use a “motive” or “purpose” test by asking if the employee’s motive/purpose was to benefit the employer at the time the tort was committed (Wade v. Berkley County, 330 S.C. 311, 498 S.E.2d 684 (Ct. App. 1998)).
2. Generally an employer may not be held vicariously liable for the tort of an independent contractor so the defining characteristics of the tortfeasor’s relationship to the principle are paramount. This issue often boils down to the level of control the employer had over the actions of the employee (Anderson v. West, 270 S.C. 184, 188, 241 S.E.2d 551 (1978).
3. The Plaintiff has the burden of proving that a master-servant (agent-principle) relationship exists. Once a preliminary showing is made however the Defendant then bears the burden to show that the tortfeasor was actually an independent contractor and therefore not under the control of the employer (Cooper v. Graham, 231 S.C. 404, 414-415, 98 S.E.2d 843 (1957).
Principle Protections
A person sought to be held liable based on Respondeat Superior also has a few unique protections:
1. A judgment against an employer for compensatory damages cannot exceed the judgment against the tortfeasor employee (Brown v. National Oil Co., 233 S.C. 345, 105 S.E.2d 81 (1958)).
2. The employer has the right of indemnity against the tortfeasor (this is indemnity which arises as a matter of law and not through a contractual relationship, Addy v. Bolton, 257 S.C. 28, 183 S.E.2d 708 (1971)).
3. A release of the tortfeasor automatically releases the employee from liability (Andrade v. Johnson, 345 S.C. 216, 546 S.E.2d 665 (Ct. App. 2001), however a recent case states that the employee must be dismissed and exonerated to release the employer (see Austin v. Specialty Transp. Services, Inc. below)).
Recent Treatment
Some recent statements from the Courts on Respondeat Superior include:
• Armstrong v. Food Lion, Inc., 371 S.C. 271, 639 S.E.2d 50 (2006):
o “The doctrine of respondeat superior rests upon the relation of master and servant. Lane v. Modern Music, Inc., 244 S.C. 299, 136 S.E.2d 713 (1964). A plaintiff seeking recovery from the master for injuries must establish that the relationship existed at the time of the injuries, and also that the servant was then about his master's business and acting within the scope of his employment. Id.”
o “An act is within the scope of a servant's employment where reasonably necessary to accomplish the purpose of his employment and in furtherance of the master's business. Id.”
o “The act of a servant done to effect some independent purpose of his own and not with reference to the service in which he is employed, or while he is acting as his own master for the time being, is not within the scope of his employment so as to render the master liable therefore. Under these circumstances the servant alone is liable for the injuries inflicted. Id.”
o “If a servant steps aside from the master's business for some purpose wholly disconnected with his employment, the relation of master and servant is temporarily suspended; this is so no matter how short the time, and the master is not liable for his acts during such time. Id.”
• Austin v. Specialty Transp. Services, Inc., 358 S.C. 298, 594 S.E.2d 867 (S.C. App. 2004):
o “Appellant maintains the trial court erred in awarding damages based on the actions of the driver because the driver was previously dismissed as a party to this action. Appellant cites two cases to support its argument- Kirby v. Gulf Ref. Co., 173 S.C. 224, 175 S.E. 535 (1934), and Collins v. Johnson, 245 S.C. 215, 139 S.E.2d 915 (1965). Appellant's reliance on these cases is misplaced. These cases only stand for the proposition that, when a principal and servant are sued together, a principal is not responsible for punitive damages under respondeat superior when the agent was exonerated from liability. In the instant case, the truck driver was dismissed as a party to the case, not exonerated from liability.”
Admission of Vicarious Liability
The South Carolina Supreme Court currently has a case under advisement that addresses the issues of whether or not an admission of vicarious liability negates the Plaintiff’s claim for negligent entrustment, training, supervision, etc. It is unclear when an opinion will be available.
Much confusion has existed since 1993 when a Federal District Court Judge in South Carolina opined that although South Carolina “apparently had not addressed this issue, the general rule is that when vicarious liability has been admitted, a plaintiff may not proceed on a negligent entrustment theory.” Bowman v. Norfolk Southern Ry. Co. 832 F.Supp. 1014 D.S.C 1993.
Tennessee
Lee L. Piovarcy & J. Lewis Wardlaw
Martin, Tate, Morrow & Marston, P.C. 6410 Polar Avenue, Suite 1000 Memphis, Tennessee 38119 (901) 522-9000 (901) 527-3746 [email protected] [email protected]
A. Elements of Proof for the Derivative Negligence Claims of Negligent Entrustment, Hiring/Retention and Supervision
1. Respondeat Superior
a. What are the elements necessary to establish liability under a theory of Respondeat Superior?
For an employer to be liable under a theory of respondeat superior, the plaintiff must prove: “(1) that the person who caused the injury was an employee, (2) that the employee was on the employer’s business, and (3) that the employee was acting within the scope of his employment when the injury occurred.” Tenn. Farmers Mut. Ins. Co. v. American Mut. Liability Ins. Co., 840 S.W.2d 933, 937 (Tenn. Ct. App. 1992). “When an employee’s job requires travel, an employer may be vicariously liable for the employee’s negligence while traveling.” Id. at 938. “If the employee’s duties create a necessity for travel, then the employee is within the scope of employment while traveling, as long as the employee does not deviate from the employer’s business and engage in conduct the employer had no reason to expect.” Id. “Travel that serves a dual purpose, the employer’s and the employee’s or a third person’s, will still be considered to be within the scope of employment.” Id. “If a trip is authorized by an employer for business purposes, then the return trip is also within the scope of employment as long as the employee has not deviated from the employer’s business.” Id. at 939.
b. Does Tennessee recognize the doctrine of placard liability?
Tennessee law is unclear on this issue, and its courts have not ruled on placard or logo liability in some time. Earlier Tennessee decisions have recognized placard liability as follows, but the nationwide trend is moving away from this position: A motor carrier is liable “under a theory of vicarious liability where its name and ICC number appear on a vehicle when an accident occurs – despite whose business the vehicle may be on at the time . . . .” Roadrunner Trucking, Inc. v. Howard Trucking Co., Inc., 1990 WL 19652, *5 (Tn. Ct. App. 1990); and see Fulmer v. Tennessee-Carolina Transp. Co., 471 S.W.2d 953, 339 (Tenn. Ct. App. 1970).
2. Negligent Entrustment
What are the elements necessary to establish liability under a theory of negligent entrustment?
The tort of negligent entrustment requires the following four elements: (1) an entrustment of a chattel, (2) to a person incompetent to use it, (3) with knowledge that the person is incompetent, and (4) that is the proximate cause of injury or damage to another. Nichols v. Atnip, 844 S.W.2d 655, 559 (Tn. Ct. App. 1992). The plaintiff must affirmatively prove that “the entruster had at the time [of the entrustment] knowledge of such facts and circumstances relating to the incompetency of the entrustee to operate the motor vehicle as would charge the entruster with knowledge of such incompetency.” Person v. Wilson, No. M2006- 00873-COA-R3-CV, 2007 WL 1585171, *4 (Tenn. Ct. App. 2007). “Thus, persons who ‘entrust’ or supply an automobile to a person known to be habitually intoxicated . . . may be held liable for the injuries proximately caused by the negligent use of the automobile . . . .” Id. at 660.
3. Negligent Retention/Hiring
What are the elements necessary to establish liability under a theory of negligent retention/hiring?
The tort of negligent hiring requires more than a showing of past criminal conduct and for the action to be successful must have: “(1) evidence of unfitness for the particular job, (2) evidence that the applicant for employment, if hired, would pose an unreasonable risk to others, (3) evidence that the prospective employee knew or should have known that the historical criminality of the applicant would likely be repetitive.” Gates v. McQuiddy Office Products, No. 02A01-9410-CV- 00240, 1995 WL 650128, *2 (Tn. Ct. App. 1995).
4. Negligent Supervision
What are the elements necessary to establish liability under a theory of negligent supervision?
Tennessee courts recognize the tort of negligent supervision. Gates v. McQuiddy Office Products, No. 02A01-9410-CV-00240, 1995 WL 650128, *3 (Tn. Ct. App. 1995). They have not, however, specifically defined the elements of negligent supervision. Holliday v. Epperson, No. 1:02-CV-1030-T, 2003 WL 23407496, *4 (W.D. Tenn. 2003). As with negligent hiring claims, this tort “generally arises when an employee’s wrongful conduct causes injury to a third party.” Id. To be successful, the plaintiff must show “that the employer was in complete charge of the work being performed by the employee.” Gates, 1995 WL 650128, *3.
B. Defenses
1. Admission of Agency
Under Tennessee law, admission of an agency relationship does not defeat a cause of action for the separate tort of negligent entrustment. Darnell v. Flour Daniel Corp., No. 94-5757, 70 F.3d 115, *2 (M.D. Tenn. 1995). “The owner’s negligence . . . is a distinct and separate issue from the operator’s negligence.” Id.
2. Traditional Tort Defenses
The Tennessee Supreme Court has held that because the tort of negligent entrustment is an independent tort based upon the negligence of the entruster, it “does not create vicarious liability” and “the jury must allocate the fault between defendants” as it would in traditional comparative fault cases. Ali v. Fisher, 145 S.W.3d 557, 564 (Tenn. 2004).
Texas
Greg C. Wilkins Christopher A. McKinney Orgain Bell & Tucker, LLP 470 Orleans Street P.O. Box 1751 Beaumont, Texas 77704-1751 Telephone: (409) 838-6412 Facsimile: (409) 838-6959 www.obt.com
A. Elements of proof for the derivative negligence claims of respondeat superior, negligent entrustment, and negligent hiring, supervising, training, or retaining.
Under Texas law, there are essentially three theories under which a carrier may be held liable for the actions of its drivers. The first theory, and the most straightforward, is the theory of respondeat superior, pursuant to which an employer is held vicariously liable for the negligent acts of an employee who is acting in the course and scope of his employment, despite the fact that the employer has committed no negligence on its own.
The remaining theories require an independent act of negligence by the carrier before it can be held liable for a driver’s actions. Claims for negligent hiring, supervising, training, or retaining are distinguishable in that they are not truly derivative in nature. Technically, they are based directly upon the employer’s negligence, rather than the negligence of the employee. As a practical matter, however, these claims serve as mechanisms by which a plaintiff can hold the employer liable even if the employee was not acting in the course and scope of his employment at the time of the accident.
A claim for negligent entrustment essentially focuses on the carrier’s negligence in permitting an unfit driver to get behind the wheel. Unlike the claims discussed above, a claim of negligent entrustment requires no employer-employee relationship.
1. Respondeat superior (let the master answer)
a. What are the elements necessary to establish liability under a theory of respondeat superior?
Under the theory of respondeat superior, an employer may be vicariously liable for the negligent acts of its employee if the employee's actions are within the course and scope of his employment. Specifically, the employer is liable for its employee's tort when the tortious act falls within the scope of the employee's general authority, in furtherance of the employer's business, and for the accomplishment of the object for which the employee was hired. Goodyear Tire & Rubber Co. v. Mayes, --- S.W.3d ---, no. 04-0993, 2007 WL 1713400, at *2 (Tex. June 15, 2007). Under Texas law, when it is proved that a truck was owned by the defendant, and that the driver was in the employment of defendant, a rebuttable presumption arises that the driver was acting within the scope of his employment when the accident occurred. Robertson Tank Lines, Inc. v. Van Cleave, 468 S.W.2d 354, 357 (Tex. 1971).
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
Unlike the theory of respondeat superior, the doctrine of negligent entrustment does not focus on whether the driver was acting in the course and scope of his employment. Ravani v. Vaught, 231 S.W.3d 568, 571 (Tex. App.—Dallas Aug. 16, 2007, no pet. h.). To establish a vehicle owner’s liability under a theory of negligent entrustment, the plaintiff must prove (1) entrustment of a vehicle by the owner; (2) to an unlicensed, incompetent, or reckless driver; (3) that the owner knew or should have known to be unlicensed, incompetent, or reckless; (4) that the driver was negligent on the occasion in question and (5) that the driver's negligence proximately caused the accident. Schneider v. Esperanza Transmission Co., 744 S.W.2d 595, 596 (Tex. 1987). Knowledge of the driver's incompetency at the time of the entrustment is an essential element to establish negligence. Briseno v. Martin, 561 S.W.2d 794, 796 n. 1 (Tex. 1977).
b. Examples
In Shupe v. Lingafelter, 192 S.W.3d 577, 580 (Tex. 2006), the Texas Supreme Court affirmed that a carrier cannot be held liable for negligent entrustment if the jury does not find that the driver’s negligence caused the plaintiff’s injury.
In TXI Transp. Co. v. Hughes, 224 S.W.3d 870 (Tex. App.—Fort Worth May 24, 2007, pet. filed), the court held that there was insufficient evidence to support a finding of negligent entrustment against the owner of a gravel truck, who had leased the truck to a gravel company, which in turn employed the driver. Specifically, the court relied upon the fact that there was no evidence that the owner knew or should have known that the driver was an unlicensed, incompetent, or reckless driver. The driver’s application, though false, indicated that he had six solid years of truck driving experience and he had a facially valid Texas driver’s license. Additionally, there was no evidence that he had a negative driving record or had been involved in other accidents.1
In Bedford v. Moore, 166 S.W.3d 454 (Tex. App.—Fort Worth 2005, no pet.), the court found sufficient evidence to uphold a negligent entrustment verdict against the owner of a gravel truck, as well as against the gravel company. The evidence included the following: the gravel company did not perform a driving history check on the driver nor did the gravel company even have a policy or procedure in place for ever performing driving history checks on its drivers; the gravel company agreed that a reasonable trucking company exercising reasonable care would have verified a prospective commercial driver's driving history; the gravel company admitted at trial that a reasonable trucking company seeing items listed on the driver’s driving record would not have employed the driver as an operator of a commercial vehicle; the driver was not required to fill out an employment application as required by section 391.21 of the Federal Motor Carrier Safety
1 Note that the court upheld the jury’s finding of negligent hiring on the part of the gravel company, as discussed hereinafter. The evidence that supported the jury’s finding in that regard probably would also have supported a negligent entrustment finding against the gravel company. Regulations (“FMCSR”); the driver was not required to perform a pre- employment drug screen as required by FMCSR section 382.301; there was not a policy or procedure for requiring random drug testing as required by FMCSR section 382.305; the driver was not required to submit to a drug screen following her first accident while driving a company vehicle as required by FMCSR section 382.303; neither the owner nor gravel company required the driver to provide them with information from or about her prior employers as required by FMCSR section 391.21 and admitted to as the standard of care for a reasonable trucking company; and there was not a driver qualification file maintained on the driver as required by FMCSR section 391.51, which would have contained the driver’s prior driving history, her prior employment history, her employment application, and a list of her violations of motor vehicle laws and ordinances. Further, when the driver showed up the morning of the accident, she had an obvious bandage on her head where she had just received nine stitches at an emergency room. The driver informed the owner that she had just come from the emergency room where she had been since midnight. Before the driver got behind the wheel, it was apparent that she had suffered a head injury and had been without sleep since at least midnight.
In Green v. Ransor, Inc., 175 S.W.3d 513, 518-519 (Tex. App.—Fort Worth 2005, no pet.), the court held that an employer may be held liable for negligent entrustment, despite the fact that the employee was not given permission to drive at the specific time and place of the accident and the employee was not given permission to drive while intoxicated.
3. Negligent hiring, supervising, training, or retaining
a. What are the elements necessary to establish liability under a theory of negligent hiring, supervising, training, or retaining?
An employer owes a duty to its other employees and to the general public to ascertain the qualifications and competence of the employees it hires, especially when the employees are engaged in occupations that require skill or experience and that could be hazardous to the safety of others. Therefore, an employer is liable for negligent hiring, supervising, training, or retaining if it employs an incompetent or unfit employee whom it knows, or by the exercise of reasonable care should have known, was incompetent or unfit, thereby creating an unreasonable risk of harm to others. Morris v. JTM Materials, Inc., 78 S.W.3d 28, 49 (Tex. App.—Fort Worth 2002, no pet.).
Specifically, in this context, a motor carrier has a duty to take steps to prevent injury to the driving public by determining the competency of a job applicant to drive one of its trucks. The purpose of this duty is to promote highway safety and prevent motor vehicle accidents. Id.
These claims are all simple negligence causes of action based on an employer's direct negligence rather than on vicarious liability. As such, the elements are a duty, a breach of that duty, and damages proximately caused by the breach. Id. More precisely, the elements are: (1) the employer owed the plaintiff a duty to hire, supervise, train, or retain competent employees; (2) the employer breached that duty; (3) the breach proximately caused the plaintiff’s injury. See, e.g., EMI Music Mex. v. Rodriguez, 97 S.W.3d 847, 858 (Tex. App.—Corpus Christi 2003, no pet.) (negligent hiring, supervision, and retention); Mackey v. U.P. Enters., 935 S.W.2d 446, 459 (Tex. App.—Tyler 1996, no writ) (negligent training and supervision).
b. Examples
In TXI Transp. Co. v. Hughes, 224 S.W.3d 870 (Tex. App.—Fort Worth May 24, 2007, pet. filed), the court found sufficient evidence to affirm a finding of negligent hiring by a gravel company, where the company failed to make an adequate inquiry the qualifications of its driver. Specifically, the company received responses to initial inquiries that reflected inaccuracies in the driver’s employment history, as described on his application, and that he did not even have a valid commercial driver’s license during a considerable part of his alleged experience. Despite receiving this information, the company made no further inquiry. As such, the court found that the company knew or should have known that the driver was not as experienced as he represented. Despite this knowledge, the company hired the driver and declined to provide further training. Finally, the court determined that a jury could find that it was reasonably foreseeable that the company’s negligence could cause the accident made the basis of the lawsuit.
In Gaza v. L. Fisher Freight, Inc., No. 04-05-00510-CV, 2006 WL 2818070 (Tex. App.—San Antonio Oct. 4, 2006, no pet.), the court found no evidence that a carrier could have reasonably foreseen that its employee driver would, in a fit of anger, drive his truck into his girlfriend’s home.
B. Defenses
1. Admission of Agency
Texas courts have adopted a doctrine that precludes a plaintiff from pursuing causes of action for negligent entrustment or negligent hiring if the employer has admitted liability under the theory of respondeat superior. See, e.g., Arrington’s Estate v. Fields, 578 S.W.2d 173, 178-79 (Tex. Civ. App.—Tyler 1979, writ ref’d n.r.e.); Patterson v. E. Tex. Motor Freight Lines, 349 S.W.2d 634, 636 (Tex. Civ. App.—Beaumont 1961, writ ref’d n.r.e.) (negligent entrustment). For defendants, the advantage of this rule is that, once the agency relationship is admitted, the employee’s driving history becomes irrelevant and inadmissible.
It should be noted that this doctrine does not apply to cases in which the plaintiff has alleged gross negligence in the hiring or entrustment of the driver. See Hines v. Nelson, 547 S.W.2d 378, 385 (Tex. Civ. App.—Tyler 1977, no writ); Adams Leasing Co. v. Knighton, 456 S.W.2d 574, 576 (Tex. Civ. App.—Houston [14th Dist.] 1970, no writ). An employer may be guilty of gross negligence in hiring an incompetent employee and held liable for exemplary damages, despite the fact that the employee is only found guilty of ordinary negligence. Wilson N. Jones Mem’l Hosp. v. Davis, 553 S.W.2d 180 (Tex. Civ. App.—Waco 1977, ref'd n.r.e.).
2. Traditional Tort Defenses
Depending on the facts of a particular case, given the derivative nature of these theories, traditional tort defenses may also apply such as proportionate responsibility, failure to mitigate damages, superseding and intervening cause, etc.
C. Punitive Damages
1. Is evidence supporting a derivative negligence claim permissible to prove an assertion of exemplary damages?
Under Texas law, the recovery of exemplary damages is governed by section 41.003 of the Texas Civil Practice and Remedies Code. The statute permits recovery of exemplary damages in a claim for gross negligence. § 41.003(a). To recover exemplary damages, the plaintiff must prove each element of its claim by clear and convincing evidence. § 41.003(b). Additionally, exemplary damages may be awarded only if the jury returns a unanimous verdict as to the liability for and the amount of the exemplary damages. § 41.003(d).
In the context of vicarious liability, the gross negligence must be attributable to the employer itself. Thus, exemplary damages may only be recovered if, and only if, (a) the employer authorized the doing and the manner of the act, or (b) the employee was unfit and the employer was reckless in employing him, or (c) the employee was employed in a managerial capacity and was acting in the scope of employment, or (d) the employer or a manager of the employer ratified or approved the act. Hammerly Oaks, Inc. v. Edwards, 958 S.W.2d 387, 391 (Tex. 1997) (citing, inter alia, Restatement (Second) of Torts § 909 (1979)). As such, an assertion that the employer is liable pursuant to the doctrine of respondeat superior is probably not sufficient to justify exemplary damages against the employer. See id.
On the other hand, the other theories of vicarious liability discussed herein are based upon the negligent acts of the employer and, therefore, may support exemplary damages. For example, in the context of negligent entrustment, exemplary damages can be imposed if the owner of the vehicle knows or should have known that the entrusted driver was incompetent or habitually reckless and the owner was grossly negligent in entrusting the vehicle to that driver. Schneider v. Esperanza Transmission Co., 744 S.W.2d 595, 596 (Tex. 1987). An employer will not, however, be found to be grossly negligent simply because the driver had less experience than he represented or because the driver did not have a valid driver’s license. TXI Transp. Co. v. Hughes, 224 S.W.3d 870, 919-920 (Tex. App.—Fort Worth May 24, 2007, pet. filed); see Williams v. Steves Indus., Inc., 699 S.W.2d 570, 574 (Tex. 1985).
Utah
Stephen J. Trayner STRONG & HANNI 3 Triad Center, Suite 500 Salt Lake City, Utah 84180 Telephone: (801) 532-7080 Fax: (801) 596-1508 [email protected]
A. Elements of Proof for the Derivative Negligence Claims of Negligent Entrustment, Hiring/Retention and Supervision
As a general rule, under Utah law no defendant may be held liable for more than his own proportionate share of fault. There are several circumstances, however, where an employer may be responsible for not only its own fault, but also for the fault of one of its employees or agents. The most common circumstances of derivative or vicarious liability involve situations involving respondeat superior, negligent entrustment, and negligent hiring/retention/supervision of an employee. In cases involving claims of derivative liability, an employer generally avoids liability where the employee or agent has no legal liability.
1. Respondeat Superior (Let the master answer)
a. What are the elements necessary to establish liability under a theory of Respondeat Superior?
It is well established in Utah that a principal or employer is responsible for injury to a third party when its employee or agent commits negligence while acting within the scope and course of his employment or agency relationship. In the context of derivative liability for an agent’s actions, Utah courts consider the right and degree of the principal’s control over the details and manner of the agent’s work in determining whether to impose derivative liability.. Glover v. BSA, 923 P.2d 1383 (Utah 1996).
There is no Utah case law on placard liability. The 10th Circuit in Mercer Transp. Co. v. Greentree Transp. Co., 341 F.3d 1192 (10th Cir. 2003), rejected the application of placard or “logo liability” to a situation other than those involving federal leasing regulations under the ICC.
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
Negligent entrustment involves misfeasance by the defendant. Generally speaking, the defendant’s liability is premised on supplying a potentially dangerous instrumentality to an individual that the defendant knows or should know is not capable of handling it safely. The dangerous instrumentality is frequently a motor vehicle. For example, where the defendant provides a vehicle to an impaired or untrained driver, and the driver then crashes the vehicle and causes injury to a plaintiff the plaintiff may successfully sue the person who provided the vehicle for negligent entrustment.
Utah courts generally follow the provisions of the Restatement (Second) of Torts. Section 390 of the Restatement provides the following standard for claims of negligent entrustment:
One who supplies directly or through a third person a chattel for the use of another whom the supplier knows or has reason to know to be likely because of his youth, inexperience, or otherwise, to use it in a manner involving unreasonable risk of physical harm to himself and others whom the supplier should expect to share in or be endangered by its use, is subject to liability for the physical harm resulting to them.
Utah appellate courts have not dealt with the subject of negligent entrustment very extensively. In Lane v. Messer, 731 P.2d 488 (Utah 1986), the Utah Supreme Court affirmed a grant of summary judgment in favor of an employer on claims of negligent entrustment and vicarious liability. In Lane, the plaintiff was injured in an automobile accident with a Honeywell employee in a van assigned to the employee and owned by Honeywell. On the evening of the accident, the employee left work to go home for the weekend. Later that evening, he drove the van to a private club where he consumed several alcoholic drinks. The accident occurred while the employee was on his way back home. The employee was intoxicated at the time.
Honeywell prohibited personal use of company vehicles except for commuting between home and work, unless the employee received express prior authorization. Employees were not to drive after drinking. Company personnel frequently violated the company’s written policy.
Honeywell also required its employees to have Class A Chauffer’s licenses which its employee did not have.
Lane sought recovery against Honeywell on two theories: first, the employee was acting within the scope of his employment and, second, that Honeywell negligently entrusted the van.
In Lane, the Court explained that generally, ownership of a motor vehicle does not alone subject the owner to liability for the negligence of permissive users. 731 P.2d at 491.1 The Court also held that an owner can be held liable for negligence if he negligently entrusted the vehicle to a driver that he knows or in the exercise of reasonable care should have known to be an incompetent, careless, reckless, or inexperienced driver or an intoxicated driver. Lane, 731 P.2d at 491.
Lane also asserted that since personal use of Honeywell vehicles was rampant and known by management, that the employee should be deemed to have been operating the van with the express or implied permission of Honeywell. However, such facts alone were insufficient to make Honeywell liable under a negligent entrustment theory.
The Court noted that the facts simply did not show any negligence on the part of Honeywell in providing a vehicle to its employee. The Court noted that the employee had a valid driver's license, and had been employed by Honeywell for eighteen months without any driving incidents. The Court further found that there was no evidence that the employee had ever driven the vehicle while intoxicated.
1 The legislature has made an exception to that general rule for negligently supplying a vehicle to a minor. U.C.A., 1953, § 41-2-22.
The Court recognized in Lane that a claim of negligent entrustment may exist even where the employee’s driving is outside of the scope of his employment relationship, provided that the employee is driving a vehicle knowingly provided by his employer.
3. Negligent Retention/Hiring/Supervision
a. What are the elements necessary to establish liability under a theory of negligent retention/hiring?
The seminal case in Utah on negligent hiring is Retherford v. AT&T Communications, 844 P.2d 949 (Utah 1992). In Retherford, the Supreme Court noted that the causes of action variously termed "negligent hiring," "negligent supervision," and "negligent retention" are all basically subsets of the general tort of negligent employment. These variants differ only in that they arise at different points in the employment relationship.
Retherford involved a claim of sexual harassment by a co-worker. Although Utah appellate courts had previously recognized the tort of negligent hiring/retention in Clover v. Snowbird Ski Resort, 808 P.2d 1037, 1048 (Utah 1991); Birkner v. Salt Lake County, 771 P.2d 1053, 1059 (Utah 1989), and Stone v. Hurst Lumber Co., 15 Utah 2d 49, 51, 386 P.2d 910, 911- 12 (1963), the Court had never clearly articulated the elements of such a claim. In Retherford, the court established the following requirements: (i) the employer knew or should have known that its employees posed a foreseeable risk to third parties, including fellow employees; (ii) the employee did indeed inflict such harm; and (iii) the employer's negligence in hiring, supervising, or retaining the employees proximately caused the injury.
B. Defenses
1. Admission of Agency
Utah has no case law on whether it is proper to allow a plaintiff to proceed against the employer on any other theory of derivative or dependent liability once an employer has admitted that the tort occurred in the course and scope of the employee or agent’s agency relationship with the employer.
However, at least one federal district court in a neighboring state has held that where punitive damages are claimed against an employer under a theory of negligent hiring, such claims may be pursued against the employer even after an admission of agency. The rationale for the ruling was stated as follows:
If an employer's negligence in hiring, training, or supervising an employee rises to the proper level, then the employer may be subject to an award of exemplary damages when the employee is not. Such a claim for exemplary damages is not essentially duplicative of the underlying negligence claim against the employee.
Hill v. Western Door, 2006 LEXIS 36641 (D. Colo. 2006)(applying Colorado law).
2. Traditional Tort Defenses
Depending on the facts of a particular case, given the derivative nature of these theories, traditional tort defenses may also apply such as lack of proximate cause, comparative fault, failure to mitigate damages, superseding and intervening cause, etc.
C. Punitive Damages
1. Standard and Burden of Proof
In Utah, punitive damages must be proved by clear and convincing evidence. Utah Code Ann. § 78-18-1(1)(a). Punitive damages are recoverable only upon proof of “willful and malicious or intentionally fraudulent conduct, or conduct that manifests a knowing and reckless indifference toward, and a disregard of, the rights of others.” Id. These standards, however, do not apply to any claim of punitive damages arising out of a tortfeasor’s operation of a motor vehicle while “voluntarily intoxicated or under the influence of any drug or combination of alcohol and [illicit]drugs.” Utah Code Ann. § 78-18-1(1)(b). Discovery into the defendant’s financial wealth cannot be done until “the party seeking punitive damages has established a pram facie case on the record that an award of punitive damages is reasonably likely against the party against whom discovery is sought,” except when the case involves an alcohol or drug impaired driver. Utah Code Ann. § 78-18-1(2).
It is unsettled in Utah whether an employer may be jointly and severally liable for an award of punitive damages due to the conduct of an employee or agent committed within the course and scope of his employment.
Virginia
H. Robert Yates, III LeClairRyan 123 East Main Street Charlottesville, VA 22902 Tel: (434) 245-3425 Fax: (434) 269-0905 Email: [email protected]
1. Respondeat Superior (Let the master answer)
a. What are the elements necessary to establish liability under a theory of Respondeat Superior?
The doctrine of respondeat superior is firmly grounded in Virginia common law. Over 80 years ago, the Supreme Court of Virginia stated the following in Davis v. Merrill, 133 Va. 69, 112 S.E. 628 (1922):
If a person, acting for himself, willfully and maliciously inflict an injury upon another, he is liable in damages for such injury. And there is no reason why a master should be permitted to turn his business over to servants who have no regard for the public welfare and thereby escape the responsibility which he would otherwise have to bear. It is manifestly right and just that both corporations and individuals be required to answer in damages for wanton and malicious assaults inflicted upon others by their servants, while acting within the scope of the servant’s employment duty, and it matters not whether the act of the servant is due to lack of judgment, the infirmity of temper, or the influence of passion, or that the servant goes beyond his strict line of duty and authority in inflicting such injury…
To recover against an employer under respondeat superior, the plaintiff must 1) establish the existence of a employer-employee relationship, 2) that the employee was conducting his employer’s business at the time of the commission of the tort, and 3) the employee was acting within the scope of his employment. Master Auto Serv. Corp. v. Bowden, 179 Va. 507, 510, 19 S.E.2d 679, 680 (1942).
While the plaintiff carries the burden of proof, this burden shifts to the employer once the plaintiff establishes an employer-employee relationship because “Virginia courts have consistently held that proof of the employment relationship creates a prima facia rebuttable presumption of the employer’s liability. Thus, when an employer-employee relationship has been establish, the burden is on the employer to prove that the employee was not acting within the scope of his employment when he committed the act complained of, and if the evidence leaves the question in doubt it becomes an issue to be determined by the jury.” Gina Chin & Assocs., Inc. v. First Union Bank, 260 Va. 533, 542, 537 S.E.2d 573, 577 (2000).
As a general rule, “an act is within the scope of employment if (1) it was expressly or impliedly directed by the employer, or is naturally incident to the business, and (2) it was performed, although mistakenly or ill-advised, with the intent to further the employer’s interest, or from some impulse or emotion that was the natural consequence of an attempt to do the employer’s business…. Id. at 541, 537 S.E.2d at 577.
A question that often arises is whether an intention tortious act falls within the scope of employment where the employer clearly does not sanction such an act. At first blush, the question would logically be answered in the negative. However, Virginia courts “have long since departed from the rule of non-liability of an employer for willful or malicious acts of his employee. Under the modern view, the willfulness or wrongful motive which moves an employee to commit an act which causes injury to a third person does not of itself excuse the employer’s liability therefor. The test of liability is not the motive of the employee in committing the act complained of, but whether the act was within the scope of the duties of employment and in the execution of the services for which he was engaged.” Tri-State Coach Corp. v. Walsh, 188 Va. 299, 306, 49 S.E.2d 363, 366 (1948).
The above cited rule of law is best illustrated on two contrasting Virginia Supreme Court cases. In Tri-State v. Walsh the Supreme Court found a defendant bus company liable for its driver’s physical assault of another motorist during a traffic dispute finding that the driver was engaged in the employer’s business, i.e. driving a bus, at the time of his tortious act.
In contrast, the Virginia Supreme Court in Davis is Cary v. Hotel Rueger, Inc., 195 Va. 980, 81 S.E.2d 421 (1954) found that defendant hotel’s bellman was not in the scope of his employment when he shot an acquaintance in the hotel who confronted him about a personal debt.
In sum, “the employee’s improper motive is not irrelevant to the issue whether the act was within the scope of employment. Rather, it is merely a factor to be considered in making that determination, and, unless the deviation from the employer’s business is slight on the one hand, or marked and unusual on the other, but falls instead between those two extremes, the question is for the jury. Gina Chin & Assocs., 260 Va. at 543, 537 S.E.2d at 578.
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
In Virginia, a plaintiff must prove that the defendant owner 1) knew, or had reasonable cause to know, that he was entrusting his car to an unfit driver and 2) that the driver was negligent as the result of his unfitness, and 3) the driver’s negligence was the proximate cause of the accident causing injury to plaintiff. Turner v. Lotts, 244 Va. 554, 557, 422 S.E.2d 765, 767 (1992).
An issue in negligent entrustment cases that may arise is whether the owner gave either expressed or implied permission for the unfit driver to use his vehicle. The courts generally hold that where there is a pattern of conduct, permissive use may be implied. Denby v. Davis, 212 Va. 836, 838, 188 S.E.2d 226, 229 (1972).
In sum, “the test of liability under the doctrine of entrustment is whether the owner knew, or had reasonable cause to know, that he was entrusting his motor vehicle to an unfit driver likely to cause injury to others. Hack v. Nester, 241 Va. 499, 503-04, 404 S.E.2d 42, 43 (1990
3. NEGLIGENT RETENTION / HIRING
a. What are the elements necessary to establish liability under a theory of negligent retention/hiring?
In Virginia, negligent retention requires proof that (1) the employer knew or should have known the employee was dangerous and likely to harm, and (2) the employer’s negligence in retaining the employee was the proximate cause of the Plaintiff’s injuries. Southeast Apartments Management, Inc. v. Jackman, 257 Va. 256, 513 S.E.2d 395 (1999).
The Virginia Supreme Court has also recognized the independent tort of negligent hiring. This cause of action requires proof that (1) the employer knew, or should have discovered by reasonable investigation, propensities in an employment position, (2) it should have been foreseeable that the hired individual posed a threat of injury to others, and (3) the employer’s negligent hiring was the proximate cause of the harm to Plaintiff. Interim Personnel of Central Virginia v. Messer, 263 Va. 435, 559 S.E.2d 704 (2002). Mere proof of the failure to investigate a potential employee’s background is not sufficient to establish an employer’s liability for negligent hiring. Majorana v. Crown Cent. Petroleum, 260 Va. 521, 539 S.E.2d 426 (2000).
The tort of negligent hiring is distinct from tort liability predicated upon the doctrine of respondeat superior, where an employer is vicariously liable for an employee’s acts committed within the scope of employment. J. v. Victory Tabernacle Baptist Church, 236 Va. 206, 372 S.E.2d 391 (1988). In contrast, negligent hiring is a tort of primary liability; the employer is principally liable for placing an unfit individual in an employment situation that involves an unreasonable risk of harm to others. Id.
b. Examples:
The fact that an employee had been convicted twice of DUI, had failed to pay fines or attend counseling, and had been declared an habitual offender, would not place a reasonable employer on notice or make it foreseeable that the employee would steal a truck, operate the stolen vehicle during non-business hours for his own frolic, and cause an accident far from his job. Interim Personnel of Central Virginia, 263 Va. 435, 559 S.E.2d 704 (2002).
A suspicion of an alcohol or drug problem by an employee, possible attraction to single women, and some “obnoxious” behavior were insufficient facts to put the employer on notice that its hiring of the employee might reasonably lead to a pre-dawn assault on a tenant. Southeast Aptmts Mgmt, 257 Va. 256, 513 S.E.2d 395 (1999).
4. NEGLIGENT SUPERVISION
Virginia does not recognize an independent cause of action for negligent supervision. Chesapeake and Potomac Tel. Co. v. Dowdy, 235 Va. 55, 365 S.E.2d 751 (1988); J. v. Victory Tabernacle Baptist Church, 236 Va. 206, 372 S.E.2d 391 (1988); Sandler v. Barber, 2004 U.S. Dist. LEXIS 9537 (W.D. Va. 2004); Muse v. Schleiden, 349 F. Supp. 2d 990 (E.D. Va. 2004).
B. Defenses
1. Admission of Agency
Virginia has not yet expressly adopted the admission of agency defense. Even if an employer has admitted the agency relationship with its employee, there is no Virginia case limiting plaintiff’s right of action against the employee or the employer on other theories of derivative or dependent liability.
The Virginia Supreme Court has permitted a Plaintiff to proceed on both vicarious liability and derivative claims against the employer, even when Plaintiff establishes a prima facie case of respondent superior. See, e.g., Majorana v. Crown Central Petroleum Corp., 260 Va. 521, 539 S.E.2d 426 (2000).
Precedent suggests the Court may consider adopting the admission of agency defense however. The Court recognizes “the tort of negligent hiring [as] distinct from tort liability predicated upon the doctrine of respondeat superior; the two theories differ in focus.” J… v. Victory Tabernacle Baptist Church, 236 Va. 206, 211, 372 S.E.2d 391, 394 (1988). The Court explains however, that derivative claims are doctrines of primary liability against the employer and enable a plaintiff to recover in circumstances when respondeat superior’s “scope of employment” limitation protects employers from liability. Interim Pers. of Cent. Va., Inc. v. Messer, 263 Va. 435, 440-441 (2002). If the Court recognizes the benefit of a derivative claim as only to preserve the cause of action in the absence of a respondeat superior claim, it may adopt the majority position and only allow a plaintiff to pursue the respondeat superior claim once the employer admits the agency relationship.
2. Traditional Tort Defenses
Depending on the facts of a particular case, traditional tort defenses may apply to derivative claims, including, contributory negligence, failure to mitigate damages, superseding and intervening cause, etc.
C. Punitive Damages
1. Is evidence supporting a derivative negligence claim permissible to prove an assertion of punitive damages?
A plaintiff can present evidence to recover punitive damages under a theory of respondeat superior or a derivative theory if the defendants’ acts constitute “willful, wanton and malicious” conduct and demonstrate a “conscious and utter disregard of [the plaintiff’s] rights, health and safety.” Niese v. City of Alexandria, 264 Va. 230, 235 (2002).
Punitive damages do not arise from ordinary negligence. Giant of Virginia, Inc. v. Pigg, 207 Va. 679, 685-86 (1967). They may be recovered only in cases where a tort has been committed under certain aggravating circumstances. Id. Their primary purpose is to warn others and punish the wrongdoer “if he has acted wantonly, oppressively, or with such malice as to evince a spirit of malice or criminal indifference to civil obligations.” Wallen v. Allen, 231 Va. 289, 297 (1986). Willful or wanton conduct imports knowledge and consciousness that injury will result from the act done.” Id.
Punitive damages cannot be awarded against an employer for the wrongful acts of his employee when the employer did not authorize or ratify those acts. Hogg v. Plant, 145 Va. 175, 180 (1926); see e.g. Tri-State Coach Corp. v. Walsh, 188 Va. 299 (1948). Without an allegation of authorization or ratification, a defendant cannot have been on notice and the punitive damages claim should not go to the jury. Anderson v. Wiggins, 1997 U.S. Dist. LEXIS 11898 (W. D. Va. 1997). This line of cases is the primary defense to a claim for punitive damages against an employer.
2. Examples of Virginia transportation cases involving derivative theory punitive damages claims against an employer:
Wallen v. Allen, 231 Va. 289 (1986): Plaintiff schoolboy was nine years old and a passenger in the back of a school bus when it was struck from behind by a tractor-trailer. He brought an action against the driver and the trucking company who owned the tractor- trailer and employed the driver. Plaintiff sought a punitive damages award against the owners of the trucking partnership on the theory of wanton negligence in hiring and retaining the driver.
The driver of the truck had been recently hired by the owners and was improperly licensed. The driver had an “operator’s license, class A,” instead of a “chauffeur's license, class A.” A driver of a vehicle, owned by others, having more than three axles and a gross weight in excess of 40,000 pounds, was required by federal regulation at the time of this case to have a “chauffeur's license, class A.”
The driver was also somewhat inexperienced in driving tractor-trailers. He had only two weeks experience in operating five-axle, eighteen-wheel equipment of the kind he was driving at the time of the collision. He had operated three-axle, ten-wheel equipment for six months before he was hired.
Furthermore, the driver had been awake and driving for an extended period of time. He had driven over 150 miles, had coupled and uncoupled four trailers, and had loaded a trailer with many tons of wood chips using a front-end loader after having only three hours sleep during the preceding eighteen hours.
Based on the foregoing facts, the trial court admitted evidence of negligence on the part of the owners and allowed the question of punitive damages to go to the jury over defendants’ objections.
On appeal, the Virginia Supreme Court reversed, holding that the breaches of duty which the jury might have attributed to the employer could amount to no more than ordinary negligence.
Anderson v. Wiggins, 1997 U.S. Dist. LEXIS 11898 (W. D. Va. 1997): Plaintiff filed a wrongful death action seeking compensatory and punitive damages arising from the death of her husband, who was killed when the pickup truck he was driving was struck by a tractor trailer. Plaintiff alleged that the driver of the tractor-trailer, who was acting in his capacity of employee, was traveling at eighty-five miles per hour, ran a stop sign and collided with her husband’s truck. Plaintiff also alleged that the employer failed to adequately interview the driver before hiring him and failed to inquire about the driver’s experience, work habits and general fitness for the position of driving a tractor trailer.
Applying Virginia law, the Federal District Court for the Western District of Virginia denied Plaintiff’s 12(b)(6) Motion to Dismiss. The Court held that Plaintiff’s alleged facts, if taken as true, would substantiate a claim of punitive damages against the employer.
Washington
Rodney L. Umberger, Jr. Joseph P. Corr Jacob M. Downs Williams Kastner Two Union Square 601 Union Street, Suite 4100 Seattle, WA 98101 Tel: (206) 628-6600 Fax: (206) 628-6611 Email: [email protected] Email: [email protected] Email: [email protected]
2130776.1
A. Derivative Negligence Claims
The issue of an employer's liability for acts of an employee is governed by state law in Washington. Typically, the common law rules of agency determine whether such liability exists. In Washington, the general rule is that in order to hold an employer vicariously liable for the tortious acts of its employees, the employee must have been acting in furtherance of the employer's business and within the course and scope of employment when the tortious act was committed. There are, however, notable exceptions to this general rule. As the Washington Supreme Court stated in Niece v. Elmview Group Home, 131 Wn.2d 39, 929 P.2d 420 (1997): “Even where an employee is acting outside the scope of employment, the relationship between employer and employee gives rise to a limited duty, owed by an employer to foreseeable victims, to prevent the tasks, premises, or instrumentalities entrusted to an employee from endangering others. This duty gives rise to causes of action for negligent hiring, retention and supervision.”
1. Respondeat Superior
To establish vicarious liability, the plaintiff must meet two criteria: (1) the relationship must be that of employer-employee; and (2) the tort must be committed "within the scope of his or her employment and in furtherance of the master's business." Kuehn v. White, 24 Wash. App. 274, 277, 600 P.2d 679, 681 (1979) (truck driver's assault on motorist was not within course and scope of employment, and thus no vicarious liability would apply); Breedlove v. Stout, 104 Wash. App. 67, 14 P.3d 897 (2001) (trial court properly granted summary judgment dismissing employer despite claim that employee had turned around on his way home in order to retrieve work-related manual).
Claims based upon respondeat superior lie only against the employer, not a supervising employee. Harvey v. County of Snohomish, 124 Wash. App. 806, 103 P.3d 836 (2004), rev'd on other grounds, 157 Wash. 2d 33, 134 P.3d 216 (2006).
Often times in trucking cases, the threshold issue is whether the employee was "on duty" at the time the tortious conduct occurred. This is usually a question of fact for the jury. For example, in Hays v. Lake, 36 Wash. App. 827, 677 P.2d 792 (1984), where a driver traveled from one job site to another and stopped along the way for a total of eight hours for unauthorized drinking, the driver was held not to have been within the course and scope of employment as a matter of law.
Travel expenses, the presence of company equipment in a vehicle, and the possibility the employee might have a piece of that company equipment repaired, do not necessarily mean a homeward-bound employee is within the scope of employment, even if that employee makes a pre-accident personal stop between work and home. For example, in Breedlove v. Stout, 104 Wash. App. 67, 14 P.3d 897 (2001), the court ruled that the employee was not acting within scope of employment when, after leaving the workplace in his own vehicle, he turned around during his drive home, in order to retrieve manual from worksite, and collided with motorcyclist en route. Thus, the employer was not liable for employee's negligent driving, even though employer could have ultimately benefited from employee's trip back to work, because the trip
2130776.1 was not at employer's request, the employer did not know of the trip, and the trip was not closely connected to employee's position as lumber mill supervisor. Id.
Notably, the Washington Supreme Court, in a plurality opinion, expanded the scope of employment somewhat by including social functions that enhance employee relations as being sufficiently within the scope of employment to create vicarious liability. Dickinson v. Edwards, 105 Wash. 2d 457, 716 P.2d 814 (1986).
2. Negligent Entrustment
It is the general rule in Washington that an owner or other person in control of a vehicle and responsible for its use is under a duty to refrain from entrusting the vehicle to another where the owner knows, or should know in the exercise of ordinary care, that the person to whom their vehicle was entrusted is “reckless, heedless, or incompetent.” Parrilla v. King County, 138 Wash. App. 427, 157 P.3d 879 (2007). In other words, a carrier will be held liable if it entrusts a vehicle to an incompetent or reckless driver.
Liability in such instances rests upon the combined negligence of the owner and of the operator; negligence of the one in entrusting the automobile to an incompetent person, and of the other in its negligent operation. Jones v. Harris, 122 Wash. 69, 210 P. 22 (1922). To prove negligent entrustment, a plaintiff must establish that: (1) the carrier loaned or entrusted its motor vehicle to another; (2) the driver was so far reckless, heedless, and incompetent in the operation of motor vehicles as to render the vehicle in their hands a dangerous instrumentality; (3) the carrier knew of the incompetency at the time it entrusted him with the vehicle; and (4) the plaintiff was injured by reason of the negligent operation of the vehicle. Id.
3. Negligent Hiring/Retention
Although it is not a true form of vicarious liability, an employer in Washington can be held liable for the torts committed by the employee, even if outside the course and scope of employment, if the employer acted negligently in hiring the employee.
Plaintiffs alleging negligent hiring must show that (1) the employer knew or, in exercising ordinary care, should have known of its employee's incompetence when the employee was hired, and (2) that the negligently hired employee caused the plaintiff's injuries. Crisman v. Pierce County Fire Protection District No. 21, 115 Wash. App. 16, 60 P.3d 652 (2002) (trial court properly granted summary judgment to employer where plaintiff failed to demonstrate a proximate cause relationship between the unfitness of a county employee and the tortious campaign practice that injured plaintiff). However, where the injury arises from circumstances other than those reasonably foreseeable by the employer, no claim for negligent hiring can be sustained. Betty Y. v. Al-Hellou, 98 Wash. App. 146, 988 P.2d 1031 (1999) (assault of child not foreseeable from hiring laborer to rehabilitate vacant apartments).
4. Negligent Supervision
2130776.1 The theory of negligent supervision creates a limited duty to control an employee, even when the employee is acting outside the scope of employment. Washington cases generally hold that an employer is liable for negligent supervision of an employee where the employer knew, or in the exercise of reasonable care, should have known, that the employee presented a risk of danger to others. Brown v. Scott Paper Worldwide Co., 143 Wash. 2d 349, 20 P.3d 921 (2001). Employers can be held liable for the torts committed by the employee, even if outside the course and scope of employment, if the employer acted negligently in supervising the employee. Id.
B. Defenses
1. Attacking Respondeat Superior/Vicarious Liability
A finding that the employee is not liable for the plaintiff's injury requires a dismissal of the vicarious liability or respondeat superior claim against the employer. Orwick v. Fox, 65 Wash. App. 71, 828 P.2d 12 (1992).
To be the basis for dismissal of the principal under vicarious liability, the dismissal of the agent must be a determination on the merits, rather than a dismissal based upon a defense personal to the agent. Bank of America NT & SA v. Hubert, 153 Wash. 2d 102, 101 P.3d 409 (2004) (dismissal of the defendant's employee did not justify dismissal of the defendant, since it was without prejudice rather than on the merits).
If a claim is asserted against the employer based upon negligence or other breach of duty independent of respondeat superior, the dismissal of the employee will not necessarily result in a dismissal of the employer. Glover for Cobb v. Tacoma General Hosp., 98 Wash. 2d 708, 658 P.2d 1230 (1983) (trial court should have dismissed claim against employer where plaintiff settled with employee and claim against employer was based solely on vicarious liability theory).
2. Comparative Fault Statute
The Comparative Fault statute directs that each defendant is responsible for the fault of another person who is that defendant's agent or employee. RCW 4.22.070(1)(a). This simply restates the principle of respondeat superior. However, this language also encourages the finder of fact to establish separate percentages of fault for employer and employee.
The statute also requires that a principal cannot be held liable for the negligence of its agent unless the plaintiff names the principal in the original action. Gass v. MacPherson's Inc. Realtors, 79 Wash. App. 65, 899 P.2d 1325 (1995). Since RCW 4.22.070 provides that a principal is responsible for the actions of another person when such person "was acting as an agent or servant of the party," it is necessary for the principal to be a named party in the action brought by the plaintiff in order for joint liability to be attached. Id.
Where a defendant is found vicariously liable for the actions of another defendant, the trial court may need to conduct a reasonableness hearing to assess the amount of settlement credit to assign. Hogan v. Sacred Heart Medical Center, 101 Wash. App. 43, 2 P.3d 968 (2000).
2130776.1
3. Traditional Tort Defenses
Depending on the case, traditional tort defenses may also apply such as: failure to mitigate damages, superseding and intervening cause, etc. In particular, the following affirmative defenses are recognized and often pled in Washington State:
a. Assumption of the Risk:
Assumption of the risk may be present where plaintiff's alleged damage and injury were the result of risks, and dangers voluntarily and knowingly assumed by the plaintiff. Plaintiff's assumption of the risk reduces any recovery by plaintiff against defendant in an amount to be established at trial. In the assumption of risk cases decided after the effective date of the adoption of the new definition of comparative fault contained in RCW 4.22 et seq., Washington courts appear to treat the issue of reasonable or unreasonable assumption of risk as being merged with the doctrine of contributory negligence. See, e.g., Home v. North Kitsap School Dist., 92 Wash. App. 709, 965 P.2d 1112 (1998).
b. Contributory Negligence
Contributory negligence may be a valid defense where at the time and place alleged in plaintiff's complaint, the plaintiff so carelessly and negligently conducted himself that he contributed directly and proximately to his own alleged injuries and damages. Plaintiff's contributory negligence reduces any recovery against defendant in an amount to be determined at trial. Contributory negligence is no longer a complete bar to recovery. In 1981 the legislature enacted the "comparative fault" statute, which is discussed above. See RCW 4.22.005. The existence of contributory negligence is ordinarily a question of fact. Young v. Caravan Corp., 99 Wash. 2d 655, 663 P.2d 834 (1983), superseded 134 Wash. 2d 468, 951 P.2d 749 (1998); Baughn v. Malone, 33 Wash. App. 592, 656 P.2d 1118 (1983). Consequently, a finding of contributory negligence as a matter of law should be made only in the clearest of cases and when reasonable minds could not have differed in their interpretation of a factual pattern. Young v. Caravan Corp., supra; Bordynoski v. Bergner, 97 Wash. 2d 335, 644 P.2d 1173 (1982). Similarly, it is error for the trial court to rule that a plaintiff is not contributorily negligent as a matter of law and thereby withdraw the issue of contributory negligence from the jury, if there is substantial evidence to support the defendant's position. Clements v. Blue Cross of Washington & Alaska, Inc., 37 Wash. App. 544, 682 P.2d 942 (1984).
(i) Plaintiff’s Intoxication
Washington law makes it a complete defense to a personal injury claim if the plaintiff's injury was proximately caused by intoxication, if the plaintiff was more than 50% at fault. See RCW 5.40.060. However, in 1994 the legislature amended RCW 5.40.060 to remove the bar to recovery where the plaintiff is a passenger in a vehicle and sues the intoxicated driver of the vehicle. This statute effectively overruled the result in Geschwind v. Flanagan, 121 Wash. 2d
2130776.1 833, 854 P.2d 1061 (1993), in which the Washington Supreme Court affirmed a jury verdict finding an intoxicated passenger 70% at fault, thus barring recovery from the driver, who was also intoxicated.
(ii) Failure to Use Seatbelts
Washington law provides that every person sixteen years and older operating or riding in a motor vehicle shall wear a seat belt. RCW 46.61.688. The statute further provides, however, that a person's failure to comply with the seat belt requirement does not constitute negligence, and is not admissible as evidence of negligence in any civil action. RCW 46.61.688(b). A parallel statute provides similar treatment for infant seats, booster seats, and child safety seat restraint systems. RCW 46.61.687
A Washington court has held that the seat belt statute will not give way to the contributory fault statute, RCW 4.22.005 et seq., with the result that the introduction of an injured person's failure to use a seat belt is not allowed. Clark v. Payne, 61 Wash. App. 189, 810 P.2d 931 (1991). The court rejected the argument that the contributory fault statute allows for the introduction of evidence of a plaintiff's fault not amounting to negligence.
4. Punitive Damages
Washington has a longstanding prohibition against punitive damages in negligence cases. Dailey v. North Coast Life Ins. Co., 129 Wn.2d 572, 919 P.2d 589 (1996) (“Since its earliest decisions, this court has consistently disapproved punitive damages as contrary to public policy.”). Consequently, a defendant should be cognizant of the possibility that a jury may seek to punish a defendant-employer through compensatory damages.
C. Merger of Vicarious Liability Claims
Although there does not appear to be any published decisions in Washington directly on point, a well-supported argument can be made that derivative liability claims such as negligent hiring/supervision merge with primary claims of negligence when an employer concedes to vicarious liability. The majority rule followed in most jurisdictions holds that, “direct liability claims merge with the vicarious liability claim when the employer has admitted an agency relationship, and are therefore properly dismissed.” Scroggins v. Yellow Freight Systems, Inc., 98 F. Supp.2d 928, 932 (2002); see also Cole v. Alton, 567 F. Supp. 1084, 1086 (N.D. Miss. 1983) (dismissing negligent entrustment claim where employer conceded employee was acting within scope of employment); Neff v. Davenport Packing Co., 131 Ill. App. 2d 791, 268 N.E.2d 574, 575 (Ill. Ct. App. 1971) (holding issues concerning negligent entrustment become irrelevant when the party so charged admits responsibility for the conduct of the negligent actor and that permitting evidence of collateral misconduct such as violations of motor vehicle laws obscures the basic issue, namely, the negligence of the driver, and “would inject into the trial indirectly, that which would otherwise be irrelevant”).
As the court stated in Elrod v. G & R Constr. Co., 275 Ark. 151, 628 S.W.2d 17 (1982), “when the defendant admits liability under one theory of recovery, such as respondeat superior,
2130776.1 difficulties do arise in that evidence prejudicial to the defendant would be admissible in establishing the basis for liability under a theory such as negligent entrustment.”
The ruling of the United States District Court for the Eastern District of Tennessee in Scroggins, 98 F. Supp.2d 928 (2000) is instructive. Scroggins involved a personal injury claim against a transportation company and its employee driver based upon a motor vehicle accident. The federal court in Scroggins dismissed the negligent entrustment, supervision and retention claims against the employer as a matter of law because the employer had admitted that its driver was acting as its agent and thereby rendered the direct negligence claims against the employer unnecessary and irrelevant:
[T]he negligent entrustment, supervision and retention claims are dependent upon a finding of negligence on the part of the employee driver. Id. In the event of a verdict for the employee driver, the negligent entrustment, supervision and retention claims would fail for a lack of proximate cause. . . [D]irect liability claims against an employer merge with the vicarious liability claim when the employer has admitted an agency relationship, and are therefore properly dismissed.
Scroggins, 98 F. Supp. 2d at 932.
2130776.1
West Virginia
Robert L. Massie Matthew R. Rawlings Huddleston Bolen LLP 611 Third Avenue P.O. Box 2185 Huntington, West Virginia Tel: (304) 529-6181 Fax: (304) 522-4312 Email: [email protected] [email protected]
{H0342465.1 }
A. Elements of Proof for the Derivative Negligence Claims of Negligent Entrustment, Hiring/Retention and Supervision
In West Virginia an employer may be held to have derivative or dependent liability for the actions of an employee.
1. Principal-Agent Relationship.
a. What are the elements necessary to establish liability under a theory of principal- agent liability? i. A principal or employer may be held liable for the actions of his agent or employee if said agent or employee is acting within the scope of his employment. Syl. Pt. 3, Barath v. Performance Trucking Co., 188 W. Va. 367, 424 S.E.2d 602 (1992); Syl. Pt. 2, Holstein v. Norandex, Inc., 194 W. Va. 727, 461 S.E.2d 473 (1995). ii. However, the West Virginia Supreme Court of Appeals has held that “the hauling of freight upon public highways in high-powered tractor-trailers demonstrates a situation which involves an "unreasonable risk of harm to others." Griffith v. George Transfer & Rigging, Inc., 157 W. Va. 316, 323, 201 S.E.2d 281, 286 (1973). Thus, a party which contracts with a carrier to haul freight within West Virginia will be held liable for any resultant damages. 1. The Court has specifically held that Griffith does not apply to tractor-trailers which are “running empty” or “deadheading” even if running under a lease or displaying a placard/logo. Shaffer v. Acme Limestone Co., 206 W. Va. 333, 345, 524 S.E.2d 688, 700 (W. Va. 1999) and King v. Lens Creek Ltd. Pshp., 199 W. Va. 136, 483 S.E.2d 265 (W. Va. 1996). b. How do the West Virginia courts determine the appropriate Principal? i. "The law indulges no presumption that an agency exists; on the contrary a person is legally presumed to be acting for himself and not as the agent of another person; and the burden of proving an agency rests upon him who alleges the existence of the agency." Syl. Pt. 1, John W. Lohr Funeral Home v. Hess & Eisenhardt Co., 152 W. Va. 723 (W. Va. 1969). ii. West Virginia does not adhere to a strict form of logo or placard liability. The existence of a logo or placard is evidence of a principal-agent relationship but, in line with the growing majority of opinions, the West Virginia Courts would consider the written terms of a lease as dispositive as long as said lease does not seek to circumvent the applicable state or federal regulations. See, Griffith v. George Transfer & Rigging, 157 W. Va. 316 (W. Va. 1973). 1. Note that although there are no cases on point, it is quite possible that West Virginia will follow the lead of other states within the Fourth Circuit in abandoning the common law doctrines of employer-employee and respondeat superior in favor of “lease
{H0342465.1 } liability” pursuant to the Federal Motor Carrier Safety Regulations or “ICC carrier liability.” See, Penn v. Va. Int’l Terminals, Inc. 819 F. Supp. 514, 521-22 (E.D. Va. 1989). iii. Plaintiff may also enter evidence of a principal-agent relationship in contradiction of a lease or placard. “An owner who engages an independent contractor to perform a job for him or her may retain broad general power of supervision and control as to the results of the work so as to insure satisfactory performance of the contract--including the right to inspect, to stop the work, to make suggestions or recommendations as to the details of the work, or to prescribe alterations or deviations in the work--without changing the relationship from that of owner and independent contractor, or changing the duties arising from that relationship.” Syl. Pt. 4, Shaffer v. Acme Limestone Co., 206 W. Va. 333 (W. Va. 1999).
2. Negligent Hiring/Retention
a. What are the elements necessary to establish liability under a theory of negligent hiring/retentions? i. The West Virginia Supreme Court of Appeals "An employer is subject to liability for physical harm to third persons caused by his [or her] failure to exercise reasonable care to employ a competent and careful contractor (a) to do work which will involve a risk of physical harm unless it is skillfully and carefully done, or (b) to perform any duty which the employer owes to third persons." Syl. Pt. 3, Sipple v. Starr, 520 S.E.2d 884, 205 W. Va. 717 (W. Va. 1999)(quoting the Restatement (Second) of Torts § 411 (1965)). ii. Normally, “the issue of negligent hiring is an issue of fact for the jury.” Kizer v. Harper, 561 S.E.2d 368, 377 (W. Va. 2001).
B. Defenses
1. Admission of Agency i. West Virginia has adopted the majority view that once an employer has admitted the agency relationship between it and the employee, it is improper to allow a plaintiff to proceed against the employer on any other theory of derivative or dependent liability. 1. For example, in Taylor v. Cabell Huntington Hosp., Inc., 208 W. Va. 128, 538 S.E.2d 719 (W. Va. 2000), the Supreme Court of Appeals puzzled over Plaintiff’s claim for “negligent supervision” of a nurse against her employer. The Court stated that because the hospital had not disputed the nurse’s employment that it made no sense to assert a claim of negligent supervision for the Plaintiff would have to prove that the nurse was negligent and that the hospital’s failure to supervise was the proximate cause of said
{H0342465.1 } injury instead of just alleging the nurse’s negligence and respondeat superior. Id at 725.
2. Traditional Tort Defenses a. Depending on the particular facts of the case, traditional tort defenses may also apply such as comparative fault, failure to mitigate damages, superseding and intervening cause, etc.
C. Punitive Damages
1. Is evidence supporting a derivative negligence claim permissible to prove an assertion of punitive damages? i. In order for a plaintiff to recover punitive damages in West Virginia, the "defendant must be shown to have engaged in a wilful, wanton, reckless, or malicious act." Mosser v. Fruehauf Corp., 940 F.2d 77, 84 (4th Cir. 1991). 1. For example, a trial court’s refusal to grant a punitive damage instruction was upheld where a tractor-trailer stalled on the side of the road during the night with part of its trailer encroaching onto the highway and was struck by a speeding vehicle. Perry v. Melton, 171 W. Va. 397, 400, 299 S.E.2d 8, 11 (W. Va. 1982).
{H0342465.1 }
Wisconsin
Michael R. Vescio John O’Neill SmithAmundsen LLC 4811 S. 76th Street, Suite 306 Tel: (414) 282-7103 Fax: (414) 282-1830 Email: [email protected] and [email protected]
A. Elements of Proof for the Derivative Negligence Claims of Negligent Entrustment, Hiring/Retention and Supervision
1. Respondeat Superior (literally, “Let the superior make answer”)
Under the tort doctrine of respondeat superior, an employer can be held vicariously liable for the negligent acts of its employees while they are acting within the scope of their employment. Kerl v. Dennis Rasmussen, Inc., 2004 WI 86, ¶¶ 17, 23, 273 Wis. 2d 106, 117, 120-21, 682 N.W.2d 328, 333-34, 335.
In terms of a placard liability theory, nothing in Wisconsin specifically addresses such a theory of recovery. Generally, one who employs an independent contractor is not vicariously liable for the contractor’s negligence. Snider v. Northern States Power Co., 81 Wis. 2d 224, 232, 260 N.W.2d 260, 263 (1977). “The most important single criterion in determining whether a person is an independent contractor is the degree to which the owner, rather than the independent contractor, retains the right to control the details of the work.” Id.
Wisconsin is, however, at present among the majority of states presuming that when a vehicle is operating under a valid lease encounters an injurious accident; the injured party may hold the motor carrier lessees liable under ICC regulations. See Williamson v. Steco Sales, 191 Wis. 2d 608, 616, 530 N.W.2d 412, 416 (Ct. App. 1995).
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
The elements of a negligent entrustment claim in Wisconsin are: (1) an entruster initially in control of the vehicle; (2) an entruster who permitted – directly or through a third person – the entrustee to operate the vehicle; (3) at the time the entruster permitted the entrustee to operate the vehicle, the entruster knew, or with reasonable care should have known, that the entrustee was likely, because of lack of capacity or youth or inexperience or another factor, to use the vehicle in a manner creating an unreasonable risk of harm to the plaintiff, others, or their property. See Iaquinta v. Allstate Ins. Co., 180 Wis. 2d 661, 668-69, 510 N.W.2d 715, 718 (Ct. App. 1993); see also Wis. JI-Civil 1014.
3. Negligent Retention/Hiring
a. What are the elements necessary to establish liability under a theory of negligent retention/hiring?
While it is clear that Wisconsin recognizes claims of negligent hiring and negligent retention, see, e.g., John Doe 1 v. Archdiocese of Milwaukee, 2007 WI 95, ¶ 31, __ Wis. 2d __, 734 N.W.2d 827 (noting such causes received first recognition in Miller v. Wal- Mart Stores, Inc., 219 Wis. 2d 250, 267-68, 580 N.W.2d 233 (1998)), as yet no case has established distinct elements for these claims beyond the delineation of the elements of a negligent training/supervision.
4. Negligent Training/Supervision
a. What are the elements necessary to establish liability under a theory of negligent training/supervision?
The elements of a negligent training or supervision claim in Wisconsin are: (1) the employer owed the plaintiff a duty of care; (2) the employer breached the duty of care during training or supervision of the employee; (3) the employee’s act or omission caused the plaintiff’s injuries; and (4) the employer’s act or omission caused the employee’s act or omission. See Doe 67C v. Archdiocese of Milwaukee, 2005 WI 123, ¶ 43, 284 Wis. 2d 307, 332-33, 700 N.W.2d 180, 192.
B. Defenses
1. Admission of Agency
Nothing in Wisconsin squarely specifically addresses whether a plaintiff may still proceed with theories of derivative or dependent liability notwithstanding any admission on the part of the employer regarding the existence of an agency relationship with the employee. Wisconsin law generally recognizes the doctrine of judicial admissions, see, e.g., Fletcher v. Eagle River Hospital, 156 Wis. 2d 165, 175-76, 456 N.W.2d 788 (1990), whereby a party may make a formal concession in a pleading or stipulation after which – if the admission is accepted, in an exercise of court discretion – neither the admitter nor the admitter’s adversary may then contradict or supplement. Relying on Fletcher, its predecessors and progeny, one might argue that an admission of agency can constitute a judicial admission that forecloses any party from offering any further evidence whose relevance is premised solely on the need to prove some other theory of derivative or dependent liability. Such an argument would at present constitute an issue of first impression in Wisconsin.
2. Traditional Tort Defenses
In cases involving theories like those under consideration in this compendium, depending on the facts and circumstances of the case at bar, traditional tort defenses such as comparative negligence, failure to mitigate damages, the doctrine of avoidable consequences, superseding or intervening case, the open and obvious hazard doctrine, and other traditional tort defenses may also become useful.
C. Punitive Damages
1. Is evidence supporting a derivative negligence claim permissible to prove an assertion of punitive damages?
Under Wisconsin punitive damage jurisprudence, the circuit court must determine, as a matter of law prior to submitting the question of punitive damages to the jury, that the evidence will support an award of punitive damages. See Jacque v. Steenberg Homes, Inc., 209 Wis. 2d 605, 614, 563 N.W.2d 154 (1997). This requires the circuit court to reach a conclusion regarding whether a reasonable jury could find from the evidence that entitlement to punitive damages has been proven by clear and convincing evidence. See Lievrouw v. Roth, 157 Wis. 2d 332, 344, 459 N.W.2d 850 (Ct. App. 1990). “Unless there is evidence from which a jury could find that the wrongdoer’s conduct was ‘outrageous,’ the trial court should not submit the issue or punitive damages to the jury.” Wangen v. Ford Motor Company, 97 Wis. 2d 260, 298, 294 N.W.2d 437, 457 (1980).
Punitive damages are not ordinarily recoverable under Wisconsin law in cases of vicarious or imputed liability. Franz v. Brennan, 150 Wis. 2d 1, 9, 440 N.W.2d 562, 566 (1989). However, since the analysis of a negligent supervision claim focuses on the tortious, i.e. negligent, conduct of the employer," Doyle v. Engelke, 219 Wis. 2d 277, 292, 580 N.W.2d 245, 251 (1998), and since the determination on whether a plaintiff may recover punitive damages depends on the acts of the party against whom punitive damages are sought, see Wis. Stat. § 895.043(3) and (1)(a), presumably a plaintiff may establish a case for punitive damages based on the tortious conduct of the employer that constitutes the requisites for a negligent supervision claim so long as such conduct occurred maliciously or in an intentional disregard of the rights of the plaintiff proved by clear and convincing evidence. Likewise, since the negligent entrustment in a case proceeding on that theory is a separate act of negligence, see Bankert v. Threshermen’s Mut. Ins. Co., 110 Wis. 2d 469, 476, 329 N.W.2d 150, 153 (1983), the act of entrusting negligently could constitute the basis for a punitive damage claim so long as such conduct occurred maliciously or in an intentional disregard of the rights of the plaintiff proved by clear and convincing evidence.
Wyoming
Scott Ortiz Ryan Schwartz WILLIAMS, PORTER, DAY & NEVILLE, P.C. P.O. Box 10700 159 No. Wolcott, Suite 400 Casper, Wyoming 82602 (307)-265-0700 Email: [email protected] [email protected]
A. Elements of Proof for the Derivative Negligence Claims of Negligent Entrustment, Hiring/Retention and Supervision
In Wyoming, there exist four often commingled theories by which an employer might be held to have derivative or dependent liability for the conduct of an employee. Derivative or dependent liability simply means that one element of imposing liability on the employer is a finding of culpability by the employee in causing an injury to a third party. In other words, if the driver is exonerated, the carrier cannot be liable.
1. Respondeat Superior (Let the master answer)
a. What are the elements necessary to establish liability under a theory of Respondeat Superior?
In Wyoming, as a matter of public policy and economic requirement, a master is liable for damages caused by the negligence of his servant while acting within the scope of the servant's employment. Combined Ins. Co. v. Sinclair, 584 P.2d 1034, 1042 (Wyo. 1978). A finding of liability under a respondeat superior liability therefore requires proof of 1) an employment relationship; 2) negligence on the part of the employee that causes harm; and 3) the negligent act occurred within the scope of the employment relationship.
1). The Employment Relationship – Employee vs. Independent Contractor.
A. EMPLOYEE: An employee is a person who, by agreement with another called the employer, performs or is to perform services for the employer, with or without compensation. The agreement may be written, oral, or implied by the behavior of the parties. In order for an employer and employee relationship to exist, the employer must have the right of control over the details of the work of the employee even though the right of control may not have been exercised. Wyoming Civil Pattern Jury Instruction 8.01, Austin v. Kaness, 950 P.2d 561 (Wyo. 1997).
B. INDEPENDENT CONTRACTOR: An “independent contractor” is one who contracts to do work according to his own methods, means, and manner of doing the work and without being subject to the control, direction, or supervision of his employer, except as to the result of the work.
a. The employer of an independent contractor is not liable for harm caused by an act of an independent contractor or employees of the independent contractor.
b. However, If the employer of an independent contractor retains the right to direct the manner of an independent contractor’s performance or assumes an affirmative duty with respect to safety, then the employer may be liable for a breach of duty of reasonable care to the employee of an independent contractor even if the employee was injured during the very work the contractor was hired to perform. Jones v. Chevron U.S.A., Inc., 718 P.2d 890 (Wyo. 1986).
c. The employer of an independent contractor may also be held liable when the workplace owner/employer exercises a controlling and pervasive role over the independent contractor's work. Franks v. Indep. Prod. Co., 96 P.3d 484, 489 (Wyo. 2004).
C. JOINT ENTERPRISE: A joint enterprise exists if these four elements are present: (1) An agreement, express or implied; (2) A common purpose; (3) A common commercial or financial interest or profit motive; and (4) An equal right to exercise control of the joint enterprise.
If a joint enterprise exists, all persons who are part of the joint enterprise are legally responsible for the negligence or fault of other persons acting within the course and scope of the joint enterprise. Holliday v. Bannister, 741 P.2d 89 (Wyo. 1987).
2). Course and Scope of Employment
A. Wyoming has adopted The Restatement (Second) of Agency, § 228 (1958). The conduct of an employee is within the scope of his employment “only if it is of the kind he is employed to perform; it occurs substantially within the authorized time and space limits; and it is actuated, at least in part, by a purpose to serve the master.” Austin v. Kaness, 950 P.2d 561, 563 (Wyo. 1997), (citing Hamilton v. Natrona County Educ. Ass’n, 901 P.2d 381, 385 (Wyo. 1995).
a. b. In a decision potentially important to the commercial transportation industry, the Wyoming Supreme Court found an employer not liable when one of its employees fell asleep while driving to the workplace even though the employee was given a per diem reimbursement for the travel to the worksite. The Court found that the employee’s decision to work a second night job and to live in a neighboring city requiring a lengthy commute was the proximate cause of the accident. This means that for an “employer to be liable for the actions of a fatigued employee on a theory of negligence, the fatigue must arise out of and in the course of employment . . . [because] . . . [t]o hold otherwise would charge an employer with knowledge of circumstances beyond his control. Naturally then, the scope of an employer's duty is bound by activity that the employer can actually control within the employment relationship.” Black v. William Insulation Co., 141 P.3d 123, 129 (Wyo. 2006).
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
Wyoming has adopted the Restatement of Torts § 390 which provides “One who supplies directly or through a third person a chattel for the use of another whom the supplier knows or has reason to know to be likely because of his youth, inexperience, or otherwise, to use it in a manner involving unreasonable risk of physical harm to himself and others whom the supplier should expect to share in or be endangered by its use, is subject to liability for physical harm resulting to them. Jack v. Enterprise Rent-A-Car Co., 899 P.2d 891, 894 (Wyo. 1995) (citing Moore v. Kiljander, 604 P.2d 204, 206 (Wyo. 1979). Stated another way, a carrier can be liable if it entrusts a vehicle to an incompetent or reckless driver.
In Wyoming, to maintain a claim for negligent entrustment, factual evidence must exist which proves that the entruster knew, or should have known, of the user's incompetence to operate a vehicle. Finch v. Canaday, 75 Wyo. 472, 483 (Wyo. 1956).
3. Negligent Retention/Hiring
a. What are the elements necessary to establish liability under a theory of negligent retention/hiring?
Wyoming has adopted the Restatement Second of Agency § 213 which provides “A person conducting an activity through servants or other agents is subject to liability for harm resulting from his conduct if he is negligent or reckless in the employment of improper persons or instrumentalities in work involving the risk of harm to others.” Cranston v. Weston County Weed & Pest Bd., 826 P.2d 251 (Wyo. 1992).
4. Negligent Supervision
a. What are the elements necessary to establish liability under a theory of negligent supervision?
This theory requires proof that (1) the employer knew or should have known of the employee’s dangerous proclivities after the employee’s hiring, and (2) the employer’s negligence was the proximate cause of the plaintiff’s injuries. The key difference between negligent hiring and supervision is the time in which the carrier has reason to know of the employee’s alleged dangerous proclivities.
B. Defenses
1. Traditional Tort Defenses
Depending on the facts of a particular case, given the derivative nature of these theories, traditional tort defenses may also apply such as comparative fault, failure to mitigate damages, superseding and intervening cause, etc.
Wyoming is a modified comparative negligence state. Additionally, each defendant is only liable for their own percentage of comparative fault and the fault of all “actors” is determined in the verdict. The term “actors” includes non- parties and those immune from suit.
C. Punitive Damages
1. Punitive damages are available against a defendant if, and only if, it is found by a preponderance of the evidence that the defendant was guilty of willful and wanton misconduct. Willful and wanton misconduct is the intentional doing of an act, or an intentional failure to do an act, in reckless disregard of the consequences, and under such circumstances and conditions that a reasonable person would know, or have reason to know, that such conduct would, with a high degree of probability, result in harm to another. Bryant v. Hornbuckle, 728 P.2d 1132, 1136 (Wyo. 1986) and Campen v. Stone, 635 P.2d 1121 (Wyo. 1981).
2. Punitive damages can be properly awarded against an employer because of the action of an agent or employee if, but only if, one of the following elements has been proven by a preponderance of the evidence:
1. The defendant-employer authorized the doing and the manner of the act of the employee/agent, or 2. The employee/agent was unfit and the defendant-employer was reckless in employing or retaining the employee/agent, or 3. The employee/agent was employed in a managerial capacity and was acting in the scope of employment, or 4. The defendant-employer ratified or approved the act(s) of the employee/agent. SEE Farmers Ins. Exchange v. Shirley, 958 P.2d 1040, 1053 (Wyo. 1998); Campen v. Stone, 635 P.2d 1121 (Wyo. 1981); State Farm Mut. Auto. Ins. Co. v. Campbell, 123 S.Ct 1513, 155 L.Ed.2d 585 (2003).