Edgewater Motels, Inc. v. Gatzke
277 N.W.2d 11 (1979)
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Rule of Law:
An employer is vicariously liable for an employee's negligent personal act if the act is a minor deviation from, and is committed contemporaneously with, work-related conduct that serves, at least in part, the interests of the employer.
Facts:
- Walgreen Company employed A. J. Gatzke as a district manager and sent him to Duluth, Minnesota, to supervise the opening of a new restaurant.
- Walgreen paid for Gatzke to stay at the Edgewater Motel, which he used as his 'office away from home'.
- Gatzke considered himself a '24 hour a day man' and was on call at all times to handle problems for his employer.
- After working a 17-hour day, Gatzke went to a bar with a colleague where they discussed business, then returned to his motel room between 1:15 and 1:30 a.m.
- In his room, Gatzke spent about five minutes filling out a detailed company expense report, a task that served both his personal interest in reimbursement and his employer's interest in tax documentation.
- Gatzke was a heavy smoker, and while or immediately after filling out the expense report, he smoked a cigarette.
- A fire, caused by the cigarette, started in or near a plastic wastebasket in Gatzke's room, causing substantial damage to the motel.
- An Edgewater maid testified she had previously observed cigarette butts in the plastic wastebaskets in Gatzke's room and other rooms, and the head housekeeper was aware of this practice.
Procedural Posture:
- Edgewater Motels, Inc. sued A. J. Gatzke and Walgreen Company in St. Louis County District Court (trial court).
- A jury found Gatzke's negligence caused 60% of the damages and that the negligence occurred within the scope of his employment with Walgreen.
- The jury also found Edgewater was contributorily negligent for 40% of the damages.
- Walgreen moved for judgment notwithstanding the verdict (JNOV), arguing Gatzke was not acting within the scope of his employment.
- The trial court judge granted Walgreen's motion for JNOV, setting aside the jury's verdict against Walgreen.
- Edgewater Motels, Inc. (appellant) appealed the trial court's order to the Supreme Court of Minnesota.
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Issue:
Does an employee's negligent act of smoking fall within the scope of employment for vicarious liability purposes when it occurs in a company-paid motel room shortly after the employee performed a work-related task that served both his and his employer's interests?
Opinions:
Majority - Scott, Justice.
Yes. An employer can be held vicariously liable for an employee's negligent smoking if the employee was otherwise acting in the scope of his employment at the time of the negligent act. Here, Gatzke's completion of the expense report served a dual purpose, furthering both his personal interests and the business purposes of his employer, Walgreen. Given that Gatzke was a 24-hour employee and his motel room functioned as his office, filling out the form was an activity within the authorized time and space of his employment. The act of smoking was not a substantial deviation but a minor, contemporaneous, personal act incidental to his employment activities. Therefore, it was reasonable for the jury to find that Gatzke was acting within the scope of his employment when his negligence caused the fire.
Analysis:
This decision broadens the scope of vicarious liability by establishing that minor personal acts, such as smoking, do not sever the employment relationship if performed incidental to work-related duties. It adopts the 'dual purpose' doctrine, where an act serving both employee and employer interests remains within the scope of employment. This precedent is significant for cases involving traveling or 'on-call' employees, suggesting that their scope of employment is not confined to strict working hours or locations, thereby increasing potential employer liability for torts that might otherwise be considered purely personal.
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