Sheffer v. Carolina Forge Co.
2013 OK 48, 306 P.3d 544, 2013 WL 3213530 (2013)
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Rule of Law:
An employer may be held liable under theories of respondeat superior and negligent entrustment for an employee's tortious conduct during a business trip, even during a personal deviation, where the employer's policies (such as providing a vehicle and reimbursing for alcohol) create a foreseeable risk, and the determination of whether the employee's actions were within the scope of employment or the entrustment was negligent are questions of fact for a jury.
Facts:
- Carolina Forge Company, L.L.C. sent two employees, William Garris III and David Billups, on a business trip to Joplin, Missouri, to entertain a client at a golf outing.
- Carolina Forge paid for the employees' airline tickets and rental car, and provided them with cash for expenses.
- The company had a policy of reimbursing employees for all business trip expenses, including alcoholic beverages, even when consumed without clients present.
- Carolina Forge had no written policy prohibiting employees from drinking alcohol and then driving the company-paid rental car, nor did it place geographical limits on their travel.
- On August 25, 2006, after completing their business activities for the day, Garris and Billups had dinner by themselves and then drove the rental car approximately 30 miles to a casino in Miami, Oklahoma, for personal entertainment.
- After several hours at the casino, Garris and Billups left to return to their hotel in Joplin, with Billups driving.
- While leaving Miami, Billups missed the correct highway ramp, drove the wrong direction on the interstate, and collided with the Plaintiffs' tractor-trailer.
Procedural Posture:
- Plaintiffs filed a negligence suit against Carolina Forge Company in the District Court of Ottawa County, a trial court.
- The complaint asserted claims under the doctrines of respondeat superior and negligent entrustment.
- Carolina Forge moved for summary judgment, arguing its employees were not acting in the course and scope of their employment and that it did not negligently entrust the vehicle.
- The trial court granted Carolina Forge's motion for summary judgment.
- Plaintiffs, as appellants, appealed the trial court's order to the Oklahoma Supreme Court.
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Issue:
Can an employer be held liable under the doctrines of respondeat superior and negligent entrustment for an employee's automobile accident when the employee, while on a business trip, deviates for a personal trip to a casino, and the employer provided the vehicle and had a policy of reimbursing employees for alcohol consumption without limitation?
Opinions:
Majority - Gurich, J.
Yes. An employer can be held liable under theories of respondeat superior and negligent entrustment, and whether liability exists under these facts is a question for the jury. For respondeat superior, an employee's deviation from business is not a complete departure from the scope of employment as a matter of law when the employer grants broad discretion, sets no travel limits, and routinely reimburses for personal expenses like alcohol, thereby blurring the line between business and personal activities. For negligent entrustment, liability arises from the act of entrusting the vehicle, not the employment relationship. An employer who supplies a car with knowledge of its employees' propensity to consume alcohol on business trips, and without any policy against driving while intoxicated, can be found to have acted negligently at the moment of entrustment, regardless of whether the employee was in the scope of employment at the time of the accident.
Concurring - Taylor, J.
Yes. The accident was a foreseeable result of the employer's conduct. When an employer provides an employee with a rental car, cash, and a history of encouraging and paying for alcohol consumption on a business trip, a resulting personal injury accident is foreseeable, and the question of liability should be decided by a fact-finder.
Analysis:
This decision significantly impacts employer liability for employee conduct during business travel by emphasizing that lenient corporate policies can expand the traditional 'scope of employment.' The court's refusal to grant summary judgment underscores that questions of deviation and foreseeability are highly fact-specific and generally must be decided by a jury. It serves as a strong cautionary tale for employers, highlighting the need for clear, written policies regarding alcohol consumption and vehicle use to mitigate liability risks. The ruling also clarifies that negligent entrustment focuses on the employer's knowledge and actions at the time the vehicle is provided, creating a separate basis for liability independent of the respondeat superior analysis.
