Roth v. First National State Bank of New Jersey
169 N.J. Super. 280, 404 A.2d 1182 (1979)
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Rule of Law:
An employer is not liable under the doctrine of respondeat superior for an employee's criminal act when that act is not of the kind the employee was hired to perform, is not actuated by a purpose to serve the employer, and is not reasonably foreseeable by the employer.
Facts:
- Jacob Roth, owner of a check-cashing business, had a daily routine of withdrawing large amounts of cash from his account at the First National State Bank of New Jersey.
- Connie Walker, a teller at the bank, observed Roth's routine.
- Walker informed her boyfriend, Morse, about Roth's habit of carrying large sums of cash, providing a description of Roth and his car.
- Morse relayed this information to Lambert and his confederates, who then planned and executed a robbery.
- On July 24, 1974, Roth withdrew $72,000 in cash from the bank.
- As Roth left the bank, he was ambushed and robbed of the money by the men who had been tipped off via the information originating from Walker.
- A regular bank guard who had previously escorted Roth to his car had been out sick for several weeks, and the replacement guard did not provide this service.
- Roth never requested an escort from the replacement guard or complained to the bank about the change in practice.
Procedural Posture:
- Jacob Roth (plaintiff) filed a lawsuit against First National State Bank of New Jersey (defendant) in a New Jersey trial court to recover the money lost in the robbery.
- The case was tried before a judge, sitting without a jury.
- The trial court judge entered a judgment in favor of the defendant bank.
- Roth (plaintiff-appellant) appealed the trial court's decision to the Superior Court of New Jersey, Appellate Division.
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Issue:
Does a bank's duty of confidentiality to its depositor make it vicariously liable for losses from a robbery that was facilitated by a bank teller's criminal tip to a third party, when the teller's act was not within the scope of her employment?
Opinions:
Majority - Conford, P.J.A.D.
No. A bank is not liable for its employee's criminal act when that act falls outside the scope of employment. The doctrine of respondeat superior does not apply where an employee's tortious conduct is not of the kind she was employed to perform, occurs outside the authorized time and space limits of the job, and is not actuated, even in part, by a purpose to serve the employer. Here, the teller's act of providing a criminal 'tip' was outrageously criminal, was in no way done in service of the bank's interests, and had no connection to her duties in effectuating customer transactions. The court distinguished this from special cases, like those involving common carriers, where a higher duty of care exists. The court also rejected the argument that the bank breached a voluntarily assumed duty to provide an escort, finding that any such duty had been abandoned long before the robbery, a fact the plaintiff was aware of and had not complained about.
Analysis:
This case reinforces the traditional limits of respondeat superior liability, particularly concerning an employee's independent criminal acts. The decision clarifies that an employer's general duty, such as a bank's duty of confidentiality, does not automatically create vicarious liability for an employee's unforeseeable criminal conduct that serves only the employee's personal interests. It demonstrates that courts will strictly apply the 'scope of employment' test, requiring a clear nexus between the employee's wrongful act and their job duties or employer's purpose. This precedent protects employers from becoming insurers against all rogue actions of their employees that are unrelated to the business enterprise.
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