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Tort Law Blog: How is Pleading Vicarious Liability Like Skinning a Cat?

December 28, 2016

Every once and a while, a court case will serve as a helpful refresher on some concepts that attorneys may have not thought of since law school.  The Tennessee Court of Appeals’ ruling in Bowman v. Benouttas includes a helpful primer on various theories of vicarious liability: respondeat superior, joint venture, and implied partnership.  In other words, there’s more than one way to get there, but you still have to plead each argument.

Background

Plaintiff Christy Gail Bowman was injured when her car collided with a tractor-trailer on I-24 in Coffee County, Tennessee.  The tractor-trailer was owned and operated by Mounir Benouttas.  Mr. Benouttas was hauling freight pursuant to a contract with MGR Freight Systems, Inc.  The shipment being delivered by Benouttas had been “brokered” to MGR by AllStates Trucking, Inc.  AllStates is a freight company that will broker its shipments by contracting with carriers such as MGR when the demand for shipping services exceeds its fleet capacity.

AllState argued that it should not bear any vicarious liability for the collision.  The trial court agreed with AllState’s arguments and granted summary judgment, concluding that there was no agency relationship between AllStates and Benouttas.  The trial court, during the pendency of the motion for summary judgment, also denied plaintiff’s attempts to amend her complaint to add additional theories of liability – implied partnership, loaned servant, vicarious liability for an independent contractor, and negligent hiring.

Plaintiff appealed the rulings on the motion to amend and the motion for summary judgment, and also disputed on appeal the court’s award of discretionary costs and the manner in which the trial court handled AllState’s tardy filing of its reply to the response to the motion for summary judgment.

Ruling

The Court of Appeals engaged in a meticulous review of each of the three grounds of vicarious liability alleged by the plaintiff.  First, the Court reviewed the doctrine of respondeat superior, which holds a principal liable for the tortious conduct of its agent when the agent was acting on the principal’s business and within the scope of his or her employment when the injury occurred.  Whether an agency relationship exists is fact-dependent.

The Court identified the seven key factors to determining whether a person is an agent or an independent contractor: (1) the right to control the conduct of the work; (2) the right of termination; (3) the method of payment; (4) the freedom to select and hire helpers; (5) the furnishing of tools and equipment; (6) the self-scheduling of work hours; and (7) the freedom to render services to other entities.  The Court noted that the most “indicative factor” is the right of the principal to control the conduct of the work of the agent.  In reviewing these factors, the following facts were important to the Court: there was no evidence that AllState ever communicated directly with Benouttas; AllState did not provide any specific instructions to Benouttas regarding the shipment; AllState did not provide any equipment to Benouttas; AllState did not actively monitor Benouttas’ progress; Benouttas was paid by MGR; and there was the brokerage contract between AllState and MGR.  All of these facts led the Court to conclude that Benouttas and MGR were independent contractors and AllState could not be vicariously liability under the doctrine of respondeat superior.

The Court then examined the question of whether AllState was involved in a joint venture.  Because each member of a joint venture is considered an agent of the others, the negligence of one member can be imputed to the rest.  The elements necessary to establish a joint venture are: (1) a common purpose; (2) some manner of agreement among the parties; (3) an equal right on the part of each party to control both the venture as a whole and any relevant instrumentality.  For this inquiry, the Court found the following additional facts relevant: Benouttas never entered into a contract with AllStates and MGR and its drivers controlled their operations and supplied the trucks and equipment.  Accordingly, plaintiffs could not establish a joint venture.

Finally, the Court examined whether liability could arise under the theory of implied partnership.  A partnership is the association of two or more persons to carry on as co-owners of a business for profit.  Where a writing does not establish the existence of a partnership, clear and convincing proof is necessary to establish that a partnership exists.  The Court observed that there was not a combination of property, labor, skill, and money, all of which is necessary to find a partnership.  Thus, the trial court correctly concluded that AllStates could not be held vicariously liable under a theory of implied partnership.

In response to the motion for summary judgment, the plaintiff argued alternative theories of liability: loaned servant, vicarious liability of an independent contractor, and negligent hiring.  These theories were not alleged in the complaint, so the trial court declined to consider them.  On appeal, the Court found no error with this decision and also agreed that it was not improper for the trial court to decline to allow plaintiff to amend her complaint to include these theories.  The Court noted that the trial court’s order, which found that there was considerable delay in making the motion, and that allowing the amendment would prejudice the defendants, was “properly supported.”

When AllStates filed its reply to plaintiff’s response to the motion for summary judgment, it did so one day after the deadline stated in the controlling scheduling order.  The trial court declined to strike the reply, noting that all parties had actually received a copy of the reply brief by the deadline and, thus, were not prejudiced by the tardy filing.  The trial court did sanction AllStates $100.00 for the overdue filing and the Court of Appeals found this sanction to be reasonable.

Plaintiff also appealed the award of discretionary costs.  AllStates requested $1,621.37 in discretionary costs for court reporter fees, deposition fees, and other expenses incurred in the course of the litigation.  The trial court awarded $1,500.00 in discretionary costs, which the Court found to be within the trial court’s discretion. Thus, the judgment of the trial court was affirmed in all respects.

Commentary

Cases involving tractor-trailer accidents are often complicated by these issues of vicarious liability.  It can frequently be quite difficult to determine who all the parties are who are involved in a tractor-trailer shipment.  Some avenues for recovery, like this one against AllStates, may be dead-ends because the relationship to the driver is too attenuated.  Other avenues for recovery may not even be known until suit has been filed and discovery commences.

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