The Supreme Court published Mid-States Plastics, Inc. v. Estate of Bryant, which dealt with the vicarious liability of an employer for tortious injury by an employee to the employee’s guest on a business trip. The SC identified the issue on appeal, succinctly, stating:

The question in this appeal is whether an employer is liable for an employee’s tortious injuries to a guest who accompanied the employee on a business trip. We opine that in order to hold the employer liable for the employee’s tortious injuries to the employee’s guest on a business trip, the employee must have acted within the scope of his authority in inviting the guest and for the purpose of accomplishing the work of the employer. Because the guest in this case had a strictly non-business purpose in accepting the employee’s invitation, we reverse the Court of Appeals and reinstate the trial court’s dismissal.

The case arose out of the employee, Edwards’, business trip to Indianapolis. He invited his pastor, Reverend William Clinton Bryant, along to visit the Reverend’s family while Edwards worked . The trip for the Reverend was free and involved no business purpose on his part for Mid-States. Unfortunately, the plane struck a cell phone tower and crashed on the return trip, killing both Edwards and Reverend Bryant.

The trial court granted summary judgment, which was overruled by the Court of Appeals. The Court of Appeals believed that there was a factual determination remaining whether Edwards had apparent authority to invite Bryant, and whether Mid-States failed to object. (See my earlier digest of the Appeal opinion, here.) The issue for the appeals court was one of authority. The SC noted that Kentucky law required not only a showing that the employee was acting within his scope of authority in inviting the guest, BUT also that “the guest’s presence must “be construed as being for the purpose of accomplishing the work of the corporation.”” Because there was no doubt that Reverend Bryant’s presence was not for the purpose of accomplishing the work of Mid-States, SJ was appropriate.

Justice Lambert dissented, noting that “Appellees established vicarious liability from the facts that the employee Edwards was acting within the scope of his authority and for a business purpose when the tortious act occurred. Contrary to the majority view, it was not necessary to establish that the third party, Reverend Bryant, was present for the benefit of the company.” Justice Lambert believes that, because Edwards was acting in furtherance of the employer when the tortious act occurred, Mid-States is vicariously liable for his actions.

This is an interesting case that does not turn on the issue of authority, as the court of appeals noted, (as did I in my earlier post), but on the issue of “furtherance of the employer’s business.” Thus, whether Edwards had authority or not was not the issue, but whether the “furtherance of the employer’s business” meant Edwards’ furtherance or Bryant’s. The majority in this 5-1 opinion, opined that Edwards’ invitation, and therefore, Bryant’s presence, must be in furtherance of Mid-States business, NOT Edwards’ actions while committing the tort. While Edwards’ actions in flying the plane for business may have furthered Mid-States purpose, his actions in inviting Bryant was purely for his pleasure, whether it was authorized or not. Bryant was, therefore, not present in furtherance of the business purpose. Therefore, no vicarious liability to Mid-States for failing to object to Edwards’ invitation.

Note: This is the second opinion in as many months limiting employer’s vicarious liability for tortious acts of its employees. It is also the second time Justice Lambert has been the lone dissenter.

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In Papa John’s International, Inc. v. Mccoy, the Supreme Court decided the issue of franchisor vicarious liability, an issue of first impression in Kentucky, arising in the context of a malicious prosecution and defamation lawsuit filed by a customer as a result of a Papa John’s pizza delivery gone wrong.

The customer originally sued the delivery driver and Papa John’s International, Inc., alleging that Papa John’s was vicariously liable as the driver’s employer. The driver’s employer, however, was RWT, Inc ., a Papa John’s franchisee. The customer filed another lawsuit against RWT. The circuit court granted summary judgment in favor of RWT and Papa John’s for various reasons. The Court of Appeals affirmed in part and reversed in part as to both. The Supreme Court noted;

As is well-settled in our case law, the driver’s employer, RWT, is subject to vicarious liability for a tort committed by its employee acting within the scope of employment. We conclude that the acts complained of here occurred within an independent course of conduct that could not have been intended by the driver to serve any purpose of the employer. So, although for different reasons that we will discuss below, we conclude that the circuit court properly granted summary judgment dismissing the malicious prosecution claim against RWT. Accordingly, we reverse the Court of Appeals as to RWT.

As to the claims involving Papa John’s, the Court concluded:

[W]e must take a more precise approach given the ubiquity of the franchise method of doing business in Kentucky. To that end, we adopt a rule in which the franchisor is vicariously liable for the tortious conduct of the franchisee when it, in fact, has control or right of control over the daily operation of the specific aspect of the franchisee’s business that is alleged to have caused the harm . Papa John’s had no control over the pizza delivery driver’s intentional, tortious conduct in this case. So Papa John’s cannot be held vicariously liable… Accordingly, we reverse the Court of Appeals as to Papa John’s.

As to RTW, the Court noted that, “if the servant “acts from purely personal motives…which [are] in no way connected with the employer’s interests, he is considered in the ordinary case to have departed from his employment, and the master is not liable.”” The Court found that allegedly making false statements to police is not connected to RTW’s business of pizza and pizza delivery.

As to Papa John’s the Court noted initially, that “taking the unique franchise arrangement into consideration, there is an emerging judicial consensus to apply a franchisor vicarious liability test that considers the franchisor’s control or right of control over the instrumentality that is alleged to have caused the harm.” The Court adopted this rule. While a franchisor may adopt or impose quality and operational controls over a franchisee, the franchisor does not typically have control over a franchisee’s employees. Because the Court found the employees statements to be an independent course of conduct that could not have been intended to serve any purpose of the employer, Papa John’s could not have been found to be vicariously liable.

Scott dissented as to RTW, but concurred as to Papa John’s. Scott concluded that there was sufficient evidence that the employee WAS acting in the course and scope of his employment at the time of the unlawful prisonment charge was made, which was based on events that allegedly occurred on the job. In fact, the managers of RTW encouraged the employee to press charges, although he initially did not want to. Justice Scott believed this was sufficient to make the issue a jury question.

Lambert dissented and believed that the Appellant had stated a claim against Papa John’s under the theory of ostensible agency. The basis for the apparent agency arises from the reliance of the party dealing with the ostensible agent. In this case, the Appellant ordered a Papa John’s pizza and not an RTW pizza. Lambert stated his belief that the theory of ostensible agency was now in “grave doubt.”

The Majority could have adopted Justice Scott’s notion that the employee was acting within the course and scope of his employment, since the act of making the allegedly false statements resulted out of his work. However, the intentional torts at issue, malicious prosecution and defamation, do not fit easily into the course and scope of a pizza delivery franchisee (as opposed to say a newspaper publisher). Here the appellant does not just have to prove that the employee made false statements, but that he did so intentionally. While Justice Scott is correct that employers can be held vicariously liable for intentional acts, the nexus between making “intentionally false” accusations and delivering pizzas is distinct from those intentional cases mentioned.