Wong-Leong v. Hawaiian Independent Refinery, Inc.
76 Hawai'i 433, 879 P.2d 538 (1994)
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Rule of Law:
An employer may be liable under respondeat superior for an employee's negligence if the employee becomes intoxicated at a company-sanctioned social event that benefits the employer. Separately, an employer may be directly liable for negligent failure to control if it has actual notice that employees are systematically consuming alcohol on its premises and fails to exercise reasonable control to prevent a foreseeable risk of harm.
Facts:
- Hawaiian Independent Refinery, Inc. (HIRI) had a long-standing tradition of employees consuming alcohol on its premises in a designated picnic area for events like monthly parties, daily horseshoe games, and celebrations for promotions.
- HIRI provided picnic tables, a grill, and a large cooler for drinks in this area, and had previously sponsored the parties by providing alcohol, though it later only provided food while tolerating the continued drinking.
- Joshua Rellamas, a HIRI employee, attended a party in the picnic area to celebrate his promotion, where he drank beer and allegedly consumed marijuana.
- The party was consistent with a company tradition where the promoted employee provided the beer for co-workers.
- Around 7:30 p.m., an evening shift supervisor instructed Rellamas and the other workers to leave the premises.
- Approximately one hour later, while driving home, Rellamas was involved in a two-car accident that killed himself, Christopher Chong, Elizabeth Lacaran, and Shasadee Lacaran-Chong.
- A medical examiner determined that Rellamas's consumption of alcohol and marijuana were contributing factors to the fatal accident.
Procedural Posture:
- Beatrice Wong-Leong and Brian Sugimoto, as representatives for the estates of the deceased, filed separate lawsuits against Hawaiian Independent Refinery, Inc. (HIRI) in the circuit court (trial court).
- The circuit court consolidated the two actions.
- HIRI filed a motion to dismiss or, in the alternative, for summary judgment, arguing it was not liable under any legal theory.
- The circuit court granted summary judgment in favor of HIRI on all claims.
- Wong-Leong and Sugimoto (Appellants) appealed the grant of summary judgment to the Supreme Court of Hawai'i.
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Issue:
Does an employer face potential liability under the theories of respondeat superior or negligent failure to control when an employee becomes intoxicated at a party on the employer's premises and subsequently causes a fatal drunk driving accident?
Opinions:
Majority - Klein, Justice.
Yes, an employer may be held liable under the theories of respondeat superior and negligent failure to control. For respondeat superior, the critical negligent act is not the driving, but the employee's act of drinking while knowing he must later drive, which may occur within the scope of employment if the social function benefits the employer. For negligent failure to control, an employer with actual notice of systematic on-premises alcohol consumption has a duty to exercise reasonable control to prevent foreseeable harm. The court reasoned that under respondeat superior, the focus shifts from the accident to the negligent act of drinking. If that drinking occurred at a party that could be found to benefit the employer by boosting morale or fostering goodwill, it could be considered within the scope of employment, creating a question of fact for the jury. The court distinguished prior cases where drinking was purely social and off-site. For the direct liability claim, the court applied the Restatement (Second) of Torts § 317. It held that an employer's duty to control is triggered not only by knowledge of a specific employee's dangerous propensity, but also by actual notice of a widespread, condoned practice of on-premises drinking that creates a foreseeable risk of drunk driving accidents. Given HIRI's long history of tolerating and facilitating these parties, a jury could find it knew of the necessity to exercise control. The court affirmed the dismissal of the social host liability claim based on precedent.
Analysis:
This decision expands the scope of potential employer liability for the off-duty torts of employees that originate on the employer's premises. By defining the negligent act for respondeat superior purposes as the on-premises drinking rather than the off-premises driving, the court makes it easier to establish the 'scope of employment' nexus for work-related social functions. Furthermore, it broadens the direct liability claim for negligent failure to control, holding that an employer's general knowledge of a dangerous on-site practice (like habitual drinking) can create a duty, even without specific knowledge of the individual tortfeasor's dangerousness. This puts a greater onus on employers to actively police and control social events and alcohol consumption on their property.
