Engler v. Gulf Interstate Eng'g, Inc.

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Justia Opinion Summary

In this case, the Supreme Court addressed whether an employer can be held vicariously liable for an after-work accident caused by an employee who was on an extended away-from-home assignment. The accident occurred when the employee was driving back to his hotel after dinner. The trial court granted summary judgment in favor of the employer. The court of appeals affirmed, holding that an employee on out-of-town travel status is not acting within the course and scope of his employment while traveling to or from a restaurant for a regular meal. The Supreme Court affirmed, holding that because the employee was not subject to his employer's control, he was not acting within the scope of his employment at the time of the accident, and therefore, the employer was not liable for the employee's actions.

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SUPREME COURT OF ARIZONA En Banc AARON ENGLER, an unmarried man, ) ) Plaintiff/Appellant, ) ) ) v. ) ) ) GULF INTERSTATE ENGINEERING, ) INC., a corporation, ) ) Defendant/Appellee. ) _________________________________ ) Arizona Supreme Court No. CV-11-0273-PR Court of Appeals Division One No. 1 CA-CV 10-0561 Yuma County Superior Court No. CV200900353 O P I N I O N Appeal from the Superior Court in Yuma County The Honorable Mark W. Reeves, Judge AFFIRMED ________________________________________________________________ Opinion of the Court of Appeals, Division One 227 Ariz. 486, 258 P.3d 304 (2011) AFFIRMED ________________________________________________________________ DON B. ENGLER, P.C. By Donald B. Engler Yuma And ABOUD & ABOUD, P.C. By Michael J. Aboud Attorneys for Aaron Engler Tucson HOLLOWAY ODEGARD & KELLY, P.C. Phoenix By Peter C. Kelly, II Charles M. Callahan Michelle N. Ogborne Attorneys for Gulf Interstate Engineering, Inc. ________________________________________________________________ B E R C H, Chief Justice ¶1 In this case, we address whether an employer can be held vicariously liable for an after-work accident caused by an employee who was on an extended away-from-home assignment. We hold that because the employee was not subject to his employer s control, he was not acting within the scope of his employment at the time of the accident and the employer is therefore not liable for his actions. I. ¶2 FACTS AND PROCEDURAL BACKGROUND Ian Gray worked for Gulf Interstate Engineering, Inc. ( Gulf ), a Texas-based energy consulting company. In 2007, Gray worked on the design and construction of a natural gas compressor for Gulf in Los Algodones, Mexico. Gray lived in Houston and flew each week from Houston to San Diego, where he rented a car and drove to Yuma. He stayed in a hotel in Yuma and commuted each day to the worksite in Mexico. ¶3 Gulf reimbursed Gray s business expenses, including the cost of his lodging, rental cars, and meals. In addition, Gulf paid Gray for his travel to and from the job site because his work required him to cross an international border each day, which often entailed returning to Yuma. significant delays, especially when Gulf considered Gray s work day to begin when he left the hotel in Yuma and to conclude when he returned - 2 - there. During after-work hours, Gulf did not attempt to supervise Gray or control his activities. ¶4 On December 11, 2007, after a day of work in Mexico, Gray returned to his hotel at approximately 7:30 p.m. Shortly thereafter, Gray and a co-worker left the hotel in Gray s rental car to go to a restaurant. On the way back to the hotel after dinner, Gray made an improper left turn and hit a motorcycle driven by Aaron Engler, who sustained serious injuries. ¶5 Engler sued Gray and Gulf for his injuries, alleging Gray s negligence and Gulf s vicarious liability. for summary judgment, arguing that it could Gulf moved not be held vicariously liable because Gray was not acting in the course and scope of his employment when the accident occurred. filed a cross-motion, urging the court to find Engler that all of Gray s activities while in Yuma were undertaken solely to serve the business purposes of Gulf Interstate until he returned to Houston. later, The trial court granted Gulf s motion. however, the court of appeals issued Thirteen days its opinion in McCloud v. Kimbro (McCloud II), 224 Ariz. 121, 125 ¶ 17, 228 P.3d 113, 117 (App. 2010), which held that an employee on outof-town travel status is within the course and scope of his employment and subjects his employer to vicarious liability while traveling to and from a restaurant for a regular meal. - 3 - Engler filed a motion for a new trial, but the trial court distinguished McCloud II and denied the motion. ¶6 Engler appealed. The court of appeals affirmed, holding that an employee on out-of-town travel status is not acting within the course and scope of his employment while traveling to or from a restaurant for a regular meal, a holding inconsistent with the holding in McCloud II. See Engler v. Gulf Interstate Eng g, Inc., 227 Ariz. 486, 258 P.3d 304 (App. 2011). Engler petitioned this Court for review. ¶7 between We granted McCloud II review and to resolve Engler. We the have apparent conflict jurisdiction under Article 6, Section 5(3) of the Arizona Constitution and A.R.S. § 12-120.24 (2003). II. ¶8 judgment. This case was DISCUSSION decided on cross-motions for summary The parties agree to the material facts, but disagree as to the legal conclusion to be drawn from them. We review de novo the superior court s grant of summary judgment and construe the facts and reasonable inferences in the light most favorable to Engler, the non-prevailing party. See Andrews v. Blake, 205 Ariz. 236, 240 ¶ 12, 69 P.3d 7, 11 (2003). ¶9 The doctrine of respondeat superior generally holds an employer vicariously liable actions of its employees. for the negligent work-related Tarron v. Bowen Mach. & Fabricating, - 4 - Inc., 225 Ariz. 147, 150 ¶ 9, 235 P.3d 1030, 1033 (2010). But an employer is vicariously liable for such acts only if the employee is acting within the scope of employment when the accident occurs. E.g., State v. Super. Ct. (Rousseau), 111 Ariz. 130, 132, 524 P.2d 951, 953 (1974). ¶10 To determine the course and scope of employment, Arizona courts have long considered the extent to which the employee was subject to the employer s control. See, e.g., Consol. Motors, Inc. v. Ketcham, 49 Ariz. 295, 305, 66 P.2d 246, 250 (1937); Rousseau, 111 Ariz. at 132, 524 P.2d at 953 (noting that the basic test in tort actions arising out of vehicular accidents is whether the employee is subject to the employer s control or right to control at the time of the accident); Tarron, 225 Ariz. at 150 ¶ 12, 235 P.3d at 1033. ¶11 This approach is endorsed by the Restatement of Agency. E.g., Ketcham, 49 Ariz. at 306, 66 P.2d at 250 (citing Restatement (First) of Agency § 220 (1933)); Santiago v. Phx. Newspapers, Inc., 164 Ariz. 505, 508-09, 794 P.2d 138, 141-42 (1990) (citing Restatement (Second) ) § 220 (1958)). (Second) of Agency ( Restatement Several sections of the Restatement (Second) identify relevant factors for determining whether the employer exercised actual control or retained the right to control the employee s conduct when the negligent act occurred. See Restatement (Second) §§ 219(2), - 5 - 220(2), 228(1), 229(2). These factors include the previous relations between the employer and the employee and whether the act (a) was the kind the employee was hired to perform, (b) was commonly done by the employee, (c) occurred within the employee s working hours, and (d) furthered the employer s employer s enterprise. purposes or fell outside the See Higgins v. Assmann Elec., Inc., 217 Ariz. 289, 297 ¶¶ 29-32, 173 P.3d 453, 461 (App. 2007) (citing Restatement (Second) § 229); Anderson v. Gobea, 18 Ariz. App. 277, 280, 501 P.2d 453, 456 (1972) (citing Restatement (Second) § 228). ¶12 Applying these factors in previous cases to evaluate an employee s requisite away-from-work employer conduct, control when we the have employee not found the maintained the right to choose where, when, and how to travel, and by what route. See Rousseau, 111 Ariz. at 132-33, 524 P.2d at 953-54. Nor has reimbursement of travel expenses or payment of a travel allowance, without more subjected the employer to liability. Id. at 133, 524 P.2d at 954 (citing Lundberg v. State, 255 N.E.2d 177, 179 (N.Y. 1969)); see also Robarge v. Bechtel Power Corp., 131 Ariz. 280, 284, 640 P.2d 211, 214 (App. 1982) (citing Lundberg). ¶13 Although confronted employee in on our this case previous out-of-town presents cases travel fact negligent status - 6 - a the pattern driving same by not an analysis applies: An employee s tortious conduct falls outside the scope of employment when the employee engages in an independent course of action that does not further the employer s purposes and is not within the control or right of control of the employer. Robarge, 131 Ariz. at 283-84, 640 P.2d at 213-14. also comports ( Restatement with the (Third) ) Restatement § 7.07, (Third) which This test of Agency consolidates the treatment of topics covered in several separate sections of [the] Restatement Second, Agency, including §§ 219, 220, 228, 229, 230, 231, 232, 233, 234, 235, 236, 237, and 267. 1 Restatement (Third) § 7.07 (Reporter s Note (a) (2006)). We agree with the court of appeals that the Restatement (Third) § 7.07 sets forth the appropriate test for evaluating whether an employee is acting within the scope of employment, and we adopt it here. 1 See Tarron, 225 Ariz. at 152-53 ¶¶ 24-28, 235 P.3d at Restatement (Third) of Agency § 7.07 provides as follows: (1) An employer is subject to vicarious liability for a tort committed by its employee acting within the scope of employment. (2) An employee acts within the scope of employment when performing work assigned by the employer or engaging in a course of conduct subject to the employer s control. An employee s act is not within the scope of employment when it occurs within an independent course of conduct not intended by the employee to serve any purpose of the employer. (3) For purposes of this section, (a) an employee is an agent whose principal controls or has the right to control the manner and means of the agent s performance of work, and (b) the fact that work is performed gratuitously does not relieve a principal of liability. - 7 - 1035-36 (following control test from Restatement (Third) § 7.03). ¶14 Applying the Restatement (Third) test, Gulf did not exercise any control over Gray at the time of the accident. Gray was not serving his employer s interests in traveling to and from the restaurant during his off hours, and Gulf did not control where, when, or even if Gray chose to eat dinner. Once Gray returned to his hotel at the end of the work day, he was free to do as he wished. That he ate dinner with a work colleague after work hours did not transform the social occasion into a business activity. 992 P.2d patronage 657, of 659 bar See Pham v. OSP Consultants, Inc., (Colo. with App. co-worker 1999) (finding during employee s after-work hours unrelated to employer s business) (citing Hynes v. Donaldson, 395 P.2d 221, 222-23 (Colo. 1964)). Because the accident occurred while Gray engaged in an independent course of action not intended to serve his employer s work purposes, Gulf is not vicariously liable. ¶15 Rather than focusing on the employer s right to control, Engler urges us to view scope of employment broadly, applying workers compensation is a compensation no-fault system principles. for Workers compensating injured employees that focuses on whether the employee was injured while working or performing a work-related activity. - 8 - Robarge, 131 Ariz. at 282, 640 P.2d at 213. Workers compensation laws are liberally construed and applied to benefit the injured employee. See Grammatico v. Indus. Comm n, 211 Ariz. 67, 72 ¶ 23, 117 P.3d 786, 791 (2005). In McCloud II, the court of appeals recognized that workers compensation principles may provide guidance in vicarious liability cases. 224 Ariz. at 123-24 ¶ 10, 228 P.3d at 115-16 (citing Anderson, 18 Ariz. App. at 280, 501 P.2d at 456). But we disagree that those standards should apply here. Workers compensation and tort law differ in purpose and scope. Robarge, 131 compensation Ariz. covers at 282, injured 640 P.2d employees, at 213. whereas Workers respondeat superior subjects employers to liability for injuries suffered by an indefinite number of third persons. Id. (citing Luth v. Rogers & Babler Constr. Co., 507 P.2d 761, 764 (Alaska 1973) (superseded by statute on other grounds)). The concept of scope of employment, when used in the tort context, is tied to the employer s right to control the employee s activity at the time of the tortious conduct. Robarge, 131 Ariz. at 282, 640 P.2d at 213; see also Throop v. F. E. Young & Co., 94 Ariz. 146, 153, 382 P.2d 560, 564 (1963) (noting that workers compensation cases are not necessarily authority for determining common-law liability therefore under the decline doctrine Engler s of respondeat invitation to compensation principles to this tort inquiry. - 9 - superior). apply We workers ¶16 Engler next urges us to hold that all of Gray s activities while in Yuma furthered Gulf s business purposes. He insists that they were not merely a large part of Mr. Gray s employment [they were] his employment. Engler, 227 Ariz. at 489 ¶ 9, 258 P.3d at 307. Whether the employee We disagree. was subject to the employer s control must be assessed at the time of the employee s tortious act. Carnes v. Phx. Newspapers, Inc., 227 Ariz. 32, 35 ¶ 10, 251 P.3d 411, 414 (App. 2011). At the time of the accident, Gulf exercised no control over Gray. ¶17 Engler similarly maintains that Gulf exercised control over Gray because Gray had to eat during his lengthy away-fromhome work assignment. We agree that Gray had to eat, but disagree that this converts Gray s personal time into work time. Not every activity of an employee on a work assignment is under the employer s control, even if the employer understands that such activity is necessary or might occur. See, e.g., Scottsdale Jaycees v. Super. Ct. (Weaver), 17 Ariz. App. 571, 575, 499 P.2d 185, 189 (1972). ¶18 Engler relies on State Department of Administration v. Schallock, 189 Ariz. 250, 941 P.2d 1275 (1997), to support the argument should that fall any within conduct the incidental scope employer subject to liability. of to authorized employment and conduct render the Although Schallock cites the Restatement (Second) factors to determine whether conduct not - 10 - expressly authorized employment, it falls provides within little managerial sexual harassment. the course guidance. Id. and scope Schallock of involved The employee in Schallock was able to carry out his harassment in part because he was a supervisor, and the harassment occurred as part of his supervision of the plaintiff, id. at 261-62, 941 P.2d at 128687, a situation far different from the one before us. itself recognized that special factual The Court and legal considerations distinguish such cases from the great majority of cases involving torts committed by a servant against a third party. ¶19 Id. at 257, 941 P.2d at 1282. Finally, Engler encourages us to follow the analysis in McCloud II. note that We decline to do so. McCloud II involved As a preliminary matter, we an administrative regulation providing that a DPS officer comes within the course and scope of employment when driving a state-owned vehicle if driving to and from meals while on out-of-town travel. ¶ 15, 228 P.3d 107(A)(2)(d)). at 117 (quoting Ariz. 224 Ariz. at 125 Admin. That regulation does not apply here. Code R2-10- But to the extent that McCloud II suggests that employees generally are acting within the course and scope of their employment when driving to a restaurant while off duty during an extended outof-town assignment because eating is incidental to a multipleday assignment, id. ¶ 17, we disagree. - 11 - ¶20 In sum, analysis of Gulf s control over Gray at the time of the accident reveals that Gray was on his own time, was not subject to his employer s control, and was not serving his employer s purposes in traveling from the restaurant during his off hours. III. ¶21 CONCLUSION For the reasons set forth above, we affirm the judgment of the superior court and the opinion of the court of appeals. __________________________________ Rebecca White Berch, Chief Justice CONCURRING: _____________________________________ Scott Bales, Vice Chief Justice _____________________________________ A. John Pelander, Justice _____________________________________ Robert M. Brutinel, Justice _____________________________________ * * Before his resignation on June 27, 2012, as a result of his appointment to the United States Court of Appeals for the Ninth Circuit, Justice Andrew D. Hurwitz participated in this case, including oral argument, and concurred in this opinion s reasoning and result. - 12 -

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