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Indiana Court of Appeals Allows Negligent Hiring Claim Despite Admission that Employee Acted Within Scope of Employment

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By Codie J. Ross, Esq.

January 4, 2017

*The finding in this report since its original publication has been overturned by the Indiana Supreme Court, please see our updated Reminger Report published in November 2017

The Indiana Court of Appeals recently determined that a negligent hiring claim against Pizza Hut can continue to move through the trial court after finding that the trial court erred when it granted summary judgment in favor of the popular establishment. [1]

On Aug. 24, 2012, the vehicle of Pizza Hut employee and Co-Defendant, Amanda Parker, collided with the rear of the moped being operated by the deceased Plaintiff, David Hamblin, knocking Hamblin into the road and causing Co-Defendant, Ralph Bliton to run over Hamblin with his vehicle. The collision led to Hamblin’s death.

Hamblin’s estate filed a wrongful death suit against Bliton, Parker and Pizza Hut (for whom Parker was delivering pizza at the time of the incident). Despite Pizza Hut’s admission that Parker was acting within the scope of her employment during the accident, the estate later amended the suit to allege that Pizza Hut negligently hired, trained, supervised and retained Parker.

Pizza Hut and Parker filed a motion for partial summary judgment in March of 2015 in Jefferson Circuit Court, arguing that the trial court should enter judgment in their favor on the negligent hiring claim because Pizza Hut already admitted that Parker was acting within the scope of her employment.  Because of that admission, Pizza Hut contended it could only be held liable for negligence under the theory of respondeat superior. The trial court granted the motion.

However, Hamblin’s estate appealed, arguing that the trial court erred when it found that the estate could only proceed with the negligence claim under the theory of respondeat superior.  The Indiana Court of Appeals agreed with the estate, writing that existing Indiana case law does not always preclude a party from pursuing both a negligent hiring claim and a negligence claim under the theory of respondeat superior.

In its appeal, the estate leaned upon case law that was more than a century old, pointing to the matter of Broadstreet v. Hall, 80 N.E. 145 (Ind. 1907).  In that case, the Indiana Supreme Court found that it was permissible for a jury to find a business owner vicariously liable for the negligent acts of his son and to find him liable for negligently trusting his son when he knew his reputation for recklessness.

Using the judicial precedent of stare decisis, the Court of Appeals wrote that it was bound to apply the Broadstreet decision to the negligence claims against Pizza Hut.  Stare decisis, Latin for “to stand by things decided”, is a judicial doctrine under which it is necessary for a court to follow earlier judicial decisions when the same points arise again in litigation. 

Further, the appellate court pointed to the Indiana Comparative Fault Act, which establishes that “in a jury trial, the trial court shall ‘instruct the jury’ to ‘determine the percentage of fault of the claimant, of the defendants, and of any person who is a nonparty.’” The Court of Appeals stated, “Under the Comparative Fault Act, it would be illogical to disallow a cause of action that could result in the allocation of additional fault to a tortfeasor”.

The decision is rather interesting considering the case law cited by both sides.  As mentioned, Hamblin’s estate leaned heavily upon the century-old case of Broadstreet v. Hall, which involved a business owner who told his nine-year-old son to deliver a message on horseback to a customer.  The business owner knew that the horse used was dangerous and that his son was a reckless rider.  As such, the Broadstreet Court allowed for claims of vicarious liability and negligent entrustment of the horse against the father.

Pizza Hut relied upon a more recent case in Tindall v. Enderle, 162 N.E.2d 764 (Ind. Ct. App. 1974).  In that case, the appellants relied upon the Broadstreet decision to argue that the trial court erroneously excluded evidence that a tavern owner had knowledge of his employee’s prior assaults on tavern patrons.  Specifically, at the trial court level, the appellants sought to introduce prior assault evidence to support their allegation that Falls Tap, Inc. (the employer) was negligent in employing and retaining Enderle (its employee) after obtaining corporate knowledge of his violent propensities.

Very interesting is the fact that the Tindall Court summarily rejected the decision in Broadstreet, citing federal authority, and concluding that Broadstreet “was of limited scope, applicable to only ‘special’ situations”.  Enderle, 162 N.E.2d at 765.  The Tindall Court also concluded that the negligent hiring cause of action “generally arises only when an agent, servant or employee steps beyond the recognized scope of his employment to commit a tortious injury upon a third party”.  Id. at 529-530.  Further clarifying that point, the Tindall Court wrote that a cause of action for negligent hiring, “is of no value where an employer has stipulated that his employee was within the scope of his employment”.  Id. at 530.

Analysis

Considering the Tindall decision, it would appear that Indiana law was well settled on the issue.  However, the Court of Appeals noted that Broadstreet was decided by the Indiana Supreme Court and that Tindall was decided by the Court of Appeals.  Leaning very heavily on the aforementioned doctrine of stare dicisis, the Court of Appeals, in its most recent decision, found that Tindall was in direct conflict with the Broadstreet decision, and noted “it is not this Court’s role to reconsider or declare invalid decisions of our Supreme Court”. 

In essence, the Court of Appeals has invited further examination of this issue by the Indiana Supreme Court.  Counsel for Pizza Hut has filed a petition for rehearing with the Court of Appeals, and if that is denied, they have advised that they plan to seek transfer to the Indiana Supreme Court.  Considering the wide-ranging ramifications of such a decision, it would not be surprising for the Indiana Supreme Court to eventually provide more clarity.  In the meantime, it is important to be mindful of the potential changes to Indiana vicarious liability law. 

If you have any questions regarding this recent decision or issue affecting general liability, please contact one of our Retail & Hospitality Liability Practice Group Members. 

This has been prepared for informational purposes only. It does not contain legal advice or legal opinion and should not be relied upon for individual situations. Nothing herein creates an attorney-client relationship between the Reader and Reminger. The information in this document is subject to change and the Reader should not rely on the statements in this document without first consulting legal counsel.

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[1] Dale Sedam, Kim Sedam, and Bryan Norris, as co-personal representatives of the Estate of David C. Hamblin, deceased v. 2JR Pizza Enterprises, LLC doing business as Pizza Hut #013413, Amanda Parker individually and as an employee of 2JR Pizza Entereprises, LLC, and Ralph Bliton, 39A05-1602-CT-296.