Ermert v. Hartford Ins. Co.
1990 La. LEXIS 611, 1990 WL 27111, 559 So. 2d 467 (1990)
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Rule of Law:
An employer is vicariously liable for the torts of a high-level executive committed during a recreational activity if that activity is also used to an appreciable extent to further the employer's business interests. Separately, an informal group does not constitute an unincorporated association with juridical personality unless its members intended to create an entity distinct from themselves.
Facts:
- A group of long-time friends, including Kenneth Decareaux and Russell Larrieu, built and used a hunting camp.
- Larrieu leased the land and was considered the owner of the camp; the others contributed labor, materials, and small annual payments for expenses like hunting pond rentals.
- The group had no formal name, constitution, by-laws, officers, or meetings, operating on informal understandings and friendships.
- Decareaux was the president and majority stockholder of Nu-Arrow Fence Company.
- Decareaux regularly used the camp to entertain Nu-Arrow employees and customers, had sold fences to most of the other hunters, and derived business from their referrals.
- Karl F. Ermert, III was a guest of Larrieu at the camp for a weekend when the group was building duck blinds for the upcoming season.
- While inside the camp house, Decareaux decided to shoot a nutria for dinner and picked up a shotgun.
- In violation of the group's informal safety rule, Decareaux began loading the shotgun inside the camp, where it accidentally discharged and severely injured Ermert's foot.
Procedural Posture:
- Karl F. Ermert, III sued Kenneth Decareaux, Nu-Arrow Fence Company, and their insurers in a state trial court.
- Ermert amended his petition to add the other members of the hunting group (Larrieu, Cummings, Brumfield, Caillouette, and Bourcq) and their insurers as defendants.
- The trial court initially granted summary judgment for the hunting group defendants, but this was reversed on appeal and the case was remanded for trial.
- After a bench trial, the trial court held Nu-Arrow vicariously liable because Decareaux was acting in the scope of his employment, but found the other hunting group members not liable. Judgment was entered for Ermert.
- Ermert and Nu-Arrow's insurer appealed to the Louisiana Court of Appeal, Fourth Circuit.
- The Court of Appeal reversed in part, holding that Nu-Arrow was not liable because Decareaux's actions were purely personal, but that the present hunting group members were liable as an unincorporated association.
- Ermert and the hunting group members sought, and were granted, writs of certiorari from the Supreme Court of Louisiana.
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Issue:
Under Louisiana law, are members of an informal hunting group vicariously liable as an unincorporated association for the negligence of a fellow member, and is the negligent member's corporate employer vicariously liable when he, as the company's president, regularly used the hunting camp to further business interests?
Opinions:
Majority - Dennis, Justice
No as to the hunting group; Yes as to the employer. Members of an informal group are not vicariously liable as an unincorporated association where they did not intend to create a separate juridical entity. However, an employer is vicariously liable for the tort of its president when his activities at a recreational camp, though partly personal, were also appreciably motivated by the purpose of serving his employer's business interests. The court reasoned that for an unincorporated association to exist as a distinct legal entity, the parties must have a common intent to create a being separate from themselves. Here, the evidence showed only an informal group of friends who hunted together at a camp owned by one member, Larrieu, with no agreement or intent to form a separate entity. Regarding the employer's liability, the court found that because Decareaux was the president and chief executive, his authority was broad. He consistently used the camp to entertain customers and employees and to generate business for Nu-Arrow. Therefore, even though the weekend's activity was partly recreational, his purpose in maintaining his presence at the camp and participating in its activities was, to an appreciable extent, to serve his company's business interests, bringing his negligent act within the scope of his employment.
Analysis:
This decision is significant for its dual holdings on associational and enterprise liability. It clarifies that the formation of an unincorporated association in Louisiana requires a specific contractual intent to create a distinct juridical person, preventing the casual grouping of individuals from automatically incurring joint liability. More importantly, the case broadens the scope of employment for high-level executives, establishing that liability can attach to an employer for torts committed during activities that blend personal recreation with business promotion. This precedent makes it harder for companies to disclaim responsibility for the actions of top officers whose business and personal lives are intertwined, expanding the concept of risks 'characteristic' of the business enterprise.
