ALFONSO E ROGERS V JB HUNT TRANSPORT INC
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Michigan Supreme Court
Lansing, Michigan 48909
____________________________________________________________________________________________
C hief Justice
Justices
Maura D. Cor rigan
Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Clifford W. Taylor
Robert P. Young, Jr.
Stephen J. Markman
Opinion
____________________________________________________________________________________________________________________________
FILED JULY 23, 2002
ALFONSO E. ROGERS, Personal Representative
of the Estate of Daimon Ja’Von Rogers,
Deceased,
Plaintiff-Appellee,
v
No.
118766
J. B. HUNT TRANSPORT, INC.,
Defendant-Appellant
and
WESLEY HOWARD CRENSHAW,
Defendant.
____________________________________
BEFORE THE ENTIRE COURT
WEAVER, J.
In this wrongful death action, we address whether a
default
entered
against
an
employee
that
conclusively
determined the employee’s negligence for the purpose of the
employee’s personal liability is also a proper foundation for
an order holding his employer vicariously liable.
The Court
of Appeals held that it was, thereby extending the effect of
the default to the employer and precluding the employer from
contesting its vicarious liability.
We reverse the decision
of the Court of Appeals and remand to the circuit court.
I
This action arises from an automobile accident that
occurred in the early afternoon on June 17, 1996.
The
decedent, Daimon Rogers, was killed when his vehicle left the
roadway and struck a tractor-trailer rig parked on the north
shoulder of the westbound I-96 expressway in Eaton County,
Michigan.
It is undisputed that defendant-appellant J. B.
Hunt owned the tractor-trailer and that defendant Wesley
Crenshaw had been operating the tractor-trailer in the course
of his employment with J. B. Hunt.
J. B. Hunt terminated Crenshaw’s employment in July 1996.
Subsequently, on July 23, 1996, the personal representative of
Daimon Rogers’ estate filed a complaint against Crenshaw and
J. B. Hunt.
It alleged Crenshaw was negligent and that his
negligence was a proximate cause of Daimon Rogers’ crash and
death.
J.
B.
It also alleged J. B. Hunt’s vicarious liability.
Hunt
filed
an
answer
on
its
own
behalf
denying
Crenshaw’s negligence and causation. However, Crenshaw failed
to personally file an answer or appear in response to two
summonses.
On March 20, 1997, the Eaton Circuit Court issued
2
a third summons and an order permitting alternative service of
process by publication and by service on codefendant, J. B.
Hunt.
Thereafter, J. B. Hunt’s attorney purported to file an
answer on behalf of Crenshaw.
Crenshaw repeatedly failed to appear for depositions over
a
fourteen-month
period.
On
August
6,
1998,
plaintiff
obtained an order of default pursuant to MCR 2.313(B) and (D)
against Crenshaw.
During the hearing on plaintiff’s motion
for the default of Crenshaw, J. B. Hunt’s attorney moved to
withdraw as counsel of record for Crenshaw.
granted both motions.
The trial court
J. B. Hunt did not object to the entry
of the order of default.
On December 15, 1998, plaintiff moved for partial summary
disposition regarding the liability of J. B. Hunt.
Plaintiff
argued that the default that was entered against defendant
Crenshaw settled the question of J. B. Hunt’s liability and,
therefore,
J.
B.
Hunt
could
not
contest
the
issues
of
negligence and causation at trial. Plaintiff also argued that
J. B. Hunt was precluded from presenting the affirmative
defense of comparative negligence.
The circuit court granted
plaintiff’s motion in part, concluding that J. B. Hunt was
vicariously liable for the negligence of Crenshaw and could
not contest at trial the issues of negligence and proximate
cause.
However, the trial court also denied the motion in
3
part, concluding that J. B. Hunt could raise the defense of
the
decedent’s
comparative
negligence
and
whether
his
comparative negligence was a proximate cause of the accident.
The Court of Appeals affirmed, citing “compelling policy
consideration[s]” involving vicarious liability. 244 Mich App
600, 610; 624 NW2d 532 (2001).
Specifically, the panel
stated, “[e]mployers are held vicariously liable not because
of their ability to control their employees’ conduct, but
because they stand to profit from their employees’ conduct.”
Id. at 610-611.
With this, the panel discarded the linchpin
justifying vicarious liability between an employer and an
employee—that the employee committed an act producing a claim
in the scope of employment.
The panel’s reasoning suggests
that if the employer financially profits from an employee’s
activities, the employer is vicariously liable not only for
everything the employee does within the scope of employment,
but also to all acts tangentially related to that employment
or occurring outside the scope of employment, even if they
occurred after the employee leaves the employment. We granted
leave
to
appeal
because
the
panel’s
suggestion
that
an
employer may be vicariously liable not only for employees’
torts committed within the scope of employment, but also for
wrongful conduct outside the scope of employment is worthy of
review.
4
II
The law regarding respondeat superior and, in particular,
how the entry of a default against an employee affects the
liability of an employer where the employer’s sole source of
liability is vicarious are questions of law.
questions of law de novo.
We review
Kelly v Builders Square, Inc, 465
Mich 29, 34; 632 NW2d 912 (2001).
The grant of a motion for
summary disposition is also reviewed de novo.
MacDonald v
PKT, Inc, 464 Mich 322, 332; 628 NW2d 33 (2001).
III
In
addressing
this
issue
as
posed
by
the
Court
of
Appeals, it is important to clarify why the courts have
imposed liability on those who were not the actors, but merely
the masters of the actors.
The reason is that “a master is
responsible for the wrongful acts of his servant committed
while
performing
employment.”
(1982).
some
duty
within
the
scope
of
his
Murphy v Kuhartz, 244 Mich 54, 56; 221 NW 143
An employer is not vicariously liable for acts
committed by its employees outside the scope of employment,
because the employee is not acting for the employer or under
the employer’s control.
For example, it is well established
that an employee’s negligence committed while on a frolic or
detour, Drobnicki v Packard Motor Car Co, 212 Mich 133; 180 NW
459 (1920), or after hours, Eberle Brewing Co v Briscoe Motor
5
Co, 194 Mich 140; 160 NW 440 (1916), is not imputed to the
employer.
In addition, even where an employee is working,
vicarious liability is not without its limits.
For example,
we have held that “there is no liability on the part of an
employer for torts intentionally or recklessly committed by an
employee beyond the scope of his master’s business.”
Bradley
v Stevens, 329 Mich 556, 562; 46 NW2d 382 (1951).
Likewise, respondeat superior or vicarious liability
principles do not support imposing liability on J. B. Hunt in
the present case merely on the basis of Crenshaw’s default.
When Crenshaw failed to participate in this litigation, he was
not acting within the scope of employment.
was
acting
litigation.
on
behalf
of
himself
only
in
Rather, Crenshaw
regard
to
the
In fact, his procedural failures were committed
when he was a former employee of J. B. Hunt.
Because his
nonparticipation was not in the course of his employment with
J. B. Hunt, extending liability to J. B. Hunt for Crenshaw’s
nonparticipation is beyond the scope of vicarious liability.
In this regard, we emphasize that the basis of vicarious
liability is not merely that an employer typically has a
greater ability to pay than an employee.
As a leading
treatise on American tort law explains, additional rationales
for vicarious liability for acts of agents within the scope of
employment include providing an incentive for employers to
6
attempt to reduce tortious conduct by their employees and the
fair
distribution
of
risk
associated
with
characteristic of a business or other entity.
Torts, § 334, pp 908-910.
activity
See Dobbs,
Risks typically associated with
operating trucks may fairly be said to be characteristic of J.
B. Hunt’s business activities. However, an employee’s refusal
to participate in litigation is not a characteristic risk of
operating
a
trucking
nonparticipation
is
not
business.
something
Accordingly,
that
an
employer
such
can
reasonably be expected to deter or fairly be expected to
absorb as a cost of doing business.
Here Crenshaw was not, in his capacity as a litigant,
acting for J. B. Hunt.
To bind an employer to the actions of
a party who was not acting within the scope of employment at
the time those actions occur, violates the central tenet of
vicarious liability that a master’s liability is derivative of
the servant’s.
In sum, the rationales that support the
imposition of vicarious liability on a master also support
limiting such liability to conduct that occurs within the
scope of employment. Id., p 910. By misapplying the policies
underpinning vicarious liability, the Court of Appeals panel
in this case took the doctrine too far.
Moreover, the Court of Appeals approach is contrary to
longstanding legal principles related to the effect of a
7
default.
As a sanction for Crenshaw’s failure to cooperate
with the discovery process, the trial court entered an order
of default against him.
this
default
negligence.
It is well settled under the law that
operates
as
an
admission
of
Crenshaw’s
However, a traditional rule of default provides
that the default of one party is not an admission of liability
on the part of a nondefaulting coparty.
Allstate Ins Co v
Hayes, 442 Mich 56, 73; 499 NW2d 743 (1993).
default
entered
against
Crenshaw
does
not
Thus, the
establish
any
liability on the part of J. B. Hunt.
While the doctrine of vicarious liability allocates the
risk of an employee’s negligent acts occurring during the
course of employment on the employer, we cannot agree that
this rule justifies the extension of the effect of a default
to a codefendant.
Default is a punitive measure, appropriate
in defined circumstances, the threat of which encourages the
cooperation of parties to a suit.
Our court rules governing
the entry of defaults and default judgments are narrowly
designed to sanction an uncooperative party.
Nowhere in the
rules is it contemplated that a cooperating party can be
sanctioned
for
a
coparty’s
1
procedural
shortcomings.1
MCR 2.313(D)(1)(a) provides that “just” sanctions are
appropriate where a party fails to appear for depositions
after being served proper notice. MCR 2.313(B)(2)(c) provides
for “rendering a judgment by default against the disobedient
party.”
8
Obviously, J. B. Hunt could not force its former employee,
Crenshaw, to participate in discovery.
been
contended
litigation
that
J.
activity
or
B.
Hunt
controlled
participated
produced Crenshaw’s default.
Indeed, it has never
in
Crenshaw’s
misconduct
that
Therefore, the goal of forcing
defendants to properly cooperate with litigation would not be
reasonably furthered by extending the consequences of the
default to J. B. Hunt.
As recognized by Stillwell v City of
Wheeling, 210 W Va 599, 606; 558 SE2d 598 (2001),
penalizing
a party that has no control over a co-party’s default would
“have no deterrent effect.”
Our decision is informed by our court system’s preference
for disposition of issues on their merits.
Mental
Health,
427
Mich
659,
662;
397
North v Dep’t of
NW2d
793
(1986)
(addressing this preference in the context of a dismissal with
prejudice).
For this reason, defaults and default judgments
are not favored in the law.
Wood v Detroit Automobile Inter-
Ins Exch, 413 Mich 573, 586; 321 NW2d 653 (1982).
In this
regard, it is important to emphasize that the entry of a
default against Crenshaw does not establish that he was
actually negligent in connection with the accident underlying
this case.
Rather, the entry of the default bars him from
contesting the issue of his negligence because of his failure
to properly participate in the litigation.
9
Unlike Crenshaw,
J. B. Hunt has participated in the litigation. Thus, there is
nothing inconsistent in allowing J. B. Hunt to contest the
alleged negligence of Crenshaw even though Crenshaw himself
would not be allowed to do so in light of the default entered
against him.
Our decision does not undercut the validity of default as
a sanction for discovery abuses.
Contrary to the Court of
Appeals concerns, allowing J. B. Hunt to contest Crenshaw’s
negligence and causation does not render the punitive purposes
of the default meaningless.
The default remains in force
against Crenshaw and forecloses his ability to present proofs
denying
his
own
negligence.2
Potentially,
plaintiff
is
prejudiced to the extent that he cannot depose Crenshaw.
However,
J.
B.
Hunt’s
defense
is
similarly
potentially
prejudiced by the absence of Crenshaw’s testimony.
The
possible prejudicial consequences of a party’s failure to
appear and resultant default do not justify the extension of
the punitive effect the sanction to an appearing party or
denying that party the opportunity to present its defense.
IV
We
conclude
that,
where
a
party’s
sole
source
of
liability is vicarious, a default entered against a coparty
2
As Crenshaw’s alleged negligence has yet to be
litigated, we express no opinion on the merits of the
negligence or proximate cause issues.
10
does not preclude the former from contesting its vicarious
liability.
The decision of the Court of Appeals is reversed
and this matter remanded to the circuit court for further
proceedings consistent with this opinion.
CORRIGAN ,
C.J.,
and
TAYLOR ,
YOUNG,
and
MARKMAN ,
concurred with WEAVER , J.
CAVANAGH, J., concurred in the result only.
11
JJ.,
S T A T E
O F
M I C H I G A N
SUPREME COURT
ALFONSO E. ROGERS, personal
representative of the estate of
Daimon Ja'Von Rogers, deceased,
Plaintiff-Appellee,
v
No. 118766
J. B. HUNT TRANSPORT, INC.,
Defendant-Appellant,
and
WESLEY HOWARD CRENSHAW.
___________________________________
KELLY, J. (dissenting).
I disagree with the majority's narrow view of vicarious
liability.
The Court of Appeals held, for legal and public policy
reasons, that it is proper to hold the employer, J. B. Hunt
Transport, Inc., liable for a tort that was established by
default.
In doing so, it followed the law:
Where several defendants are treated as one,
as in cases involving employers and employees, but
one defaults, the defaulter still has the benefit
of any contributory negligence established against
the plaintiff by the remaining defendant.
Thus,
where vicarious liability is found, the court
should tell the jury that the defaulting employee
has been found negligent, and his negligence should
be compared to that of the plaintiff in determining
the defendants' liability.
[57B Am Jur 2d,
Negligence, § 1276, p 174.]
I agree with the Court of Appeals, which used the default of
the driver, Wesley Crenshaw, to preclude Hunt from denying
liability for Crenshaw's negligence.
The majority relies on the notion that Hunt's "control"
of Crenshaw at the time of the default is the key to whether
Hunt is liable.
It assumes that the only time when liability
for Crenshaw's acts could attach was when Crenshaw was an
employee of Hunt.
Certainly, control is one of the considerations upon
which respondeat superior liability reposes.
However, it is
not the only consideration. When the majority uses control as
its only consideration, it confuses liability arising from
respondeat superior with vicarious liability arising from
another doctrine, agency.
The difference between the two is explained by 27 Am Jur
2d, Employment Relationship, § 460, pp 897-898:
Vicarious liability based on agency is
distinct from liability based on respondeat
superior in that the employer is not liable for the
acts of the employee under the former theory unless
the employee acted on behalf of or under the
authority of the employer and unless the employer
clearly approved of the wrongful conduct.
The majority is using an agency theory to support vicarious
liability. Because Hunt had no control over Crenshaw when the
2
latter
defaulted,
the
majority
will
not
allow
vicarious
liability to attach.
Vicarious liability should be found in this case not on
the basis of agency, but on the basis of the doctrine of
respondeat superior.
Holding the employer liable for the
underlying tort, even though its employee defaulted, would
satisfy vital policy interests, such as justice, convenience,
deterrence, social justice, and the ability to give the victim
an effective remedy.
These approaches have been explained in
Am Jur 2d:
The modern basis for vicarious liability is
that, as a matter of public policy, an enterprise
or an activity should bear the risk of a tort-
committed or resulting from omission--of those who,
in fact, carry on the enterprise, activity or
operation.
It is a part of the cost of doing
business or carrying on various activities; and, in
modern society, in Western countries at least, the
cost is spread throughout industries or even the
public at large by use of liability insurance and
similar self-insurer devices--rather than being
borne by some hapless injury victim.
Thus, the
doctrine has been developed and extended out of the
necessity
of
changing
social
and
economic
conditions. [57B Am Jur 2d, Negligence, § 1753, pp
447-448.]
The authors of Torts, Prosser and Keeton, also assert
that vicarious liability is not a mere question of control,
and that other bases exist for it:
The losses caused by the torts of employees,
which as a practical matter are sure to occur in
the conduct of that employer's enterprise, are
placed upon that enterprise itself, as a required
cost of doing business. They are placed upon the
3
employer because, having engaged in an enterprise,
which will on the basis of all past experience
involve harm to others through the torts of the
employees, and sought to profit by it, it is just
that he, rather than the innocent injured plaintiff
should bear them; and because he is better able to
absorb them, and to distribute them, through
prices, rates or liability insurance, to the
public, and so to shift them to society, to the
community at large. [Prosser & Keeton, Torts (5th
ed), § 69, pp 500-501.]
Therefore, the majority errs by giving undue weight to
control.
Had Crenshaw been held liable after a trial, Hunt
would have been liable for Crenshaw's negligence, even though
it has no control over what Crenshaw did, said, or admitted at
trial.
This is because, on a respondeat superior theory, the
employer is normally liable for the employee's underlying
tort.
There is another good reason to hold the employer liable
here.
Default is considered to be a punitive measure, but it
is accepted in the law because it is needed to preserve a fair
tribunal, free of egregious discovery abuses.
Despite this
need, the majority allows the employer a potential benefit
from the driver's default, the driver's absence from trial as
a major witness.
Moreover,
the
policy
reasons
cited
by
support the use of the default against Hunt.
the
majority
As it points
out, the imposition of vicarious liability serves as an
incentive
for
employers
to
reduce
4
tortious
conduct
and
promotes a fair distribution of risk. Trucking companies hire
drivers to traverse multiple states where they might become
involved in accidents.
They must be held to know that a
lawsuit and the potential default of an out-of-state driver
are risks to be expected in their business.1
In balance, it
is better that Hunt not be allowed a potential benefit from
the absence of Crenshaw at trial.
Finally, it should be noted that the imposition of
vicarious liability on Hunt would not render it defenseless at
trial.
A default would establish negligence on the part of
Crenshaw, but it would not determine the extent of Hunt's
liability.
Under the Court of Appeals decision, Hunt would
still be able to contest up to ninety-nine percent of its
liability at trial.
Because I believe that the majority's analysis is too
restrictive a view of vicarious liability based on respondeat
superior, I dissent.
1
In fact, it has happened before that a trucking
company's driver, resident in another state, became involved
in an accident and defaulted upon being sued. See, e.g., J B
Hunt Transport, Inc v Bentley, 207 Ga App 250; 427 SE2d 499
(1993).
5
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