Opinion
NO. 2018-CA-000928-MR AND NO. 2018-CA-001213-MR NO. 2018-CA-001014-MR
05-08-2020
Laura Frances HENSLEY, Administratrix, Estate of James Elijah Hensley, Appellant v. TRAXX MANAGEMENT COMPANY, Thoroughbred Energy, LLC, and Shell Oil Company, Appellees Traxx Management Company, Cross-Appellant v. Laura Frances Hensley, Administratrix, Estate of James Elijah Hensley, Cross-Appellee
BRIEFS FOR APPELLANT/CROSS-APPELLEE: Sandra M. Varellas, D. Todd Varellas, James J. Varellas III, Lexington, Kentucky. BRIEFS FOR APPELLEES THOROUGHBRED ENERGY, LLC, AND SHELL OIL COMPANY; AND APPELLEE/CROSS-APPELLANT TRAXX MANAGEMENT COMPANY: Ronald l. Green, James M. Inman, Lexington, Kentucky.
BRIEFS FOR APPELLANT/CROSS-APPELLEE: Sandra M. Varellas, D. Todd Varellas, James J. Varellas III, Lexington, Kentucky.
BRIEFS FOR APPELLEES THOROUGHBRED ENERGY, LLC, AND SHELL OIL COMPANY; AND APPELLEE/CROSS-APPELLANT TRAXX MANAGEMENT COMPANY: Ronald l. Green, James M. Inman, Lexington, Kentucky.
BEFORE: COMBS, KRAMER, AND K. THOMPSON, JUDGES.
OPINION
COMBS, JUDGE:
Laura Frances Hensley, the Administratrix of the Estate of James Elijah Hensley (the Estate), appeals from pre-trial orders of the Fayette Circuit Court that dismissed the Estate's wrongful death action against Thoroughbred Energy, LLC, and Shell Oil Company. The Estate also appeals from the judgment entered in favor of Traxx Management Company (Traxx). With respect to Traxx, two trials have been held. After the first trial, a jury rendered a verdict in favor of the Estate – despite Traxx's motions for directed verdict and judgment notwithstanding the verdict. Following the second trial, a jury returned a verdict in favor of Traxx. On appeal, the Estate seeks reinstatement of the verdict in its favor from the first trial. Traxx Management has filed a cross-appeal in which it contends that the trial court erred by failing to grant a judgment notwithstanding the verdict rendered at the first trial.
The following material facts are essentially undisputed. At approximately 2:30 in the morning of November 7, 2011, James Hensley, the decedent, donned a mask and entered a Shell Oil-branded combination gas station/convenience store in Mt. Vernon. The station's surveillance system recorded the events that followed on videotape.
Wielding a butcher knife, Hensley demanded cash and cigarettes from the station's overnight clerk, Wendell Price. Although Price kept a small caliber pistol on his person, he immediately complied with Hensley's demands. As Hensley fled the station, he threatened Price. Hensley stated that he would kill Price and his family if Price were to call the police.
Hensley was aided in the crime by his brother and a young woman who dropped Hensley off at the station and waited in a getaway car parked nearby. After the robbery, Hensley headed to the car. Price testified that he became upset at Hensley's threat to kill his family. He decided to pursue the fleeing Hensley. Standing outside the station, at the edge of the property, Price fired his pistol several times in Hensley's direction. One of Price's shots struck Hensley in the back, killing him. Hensley was found 150 feet from the station. Price was promptly fired by Traxx Management. The grand jury did not indict him.
On November 5, 2012, Hensley's mother, acting as administratrix of his estate, filed a wrongful death action in Fayette Circuit Court against Traxx Management, Thoroughbred Energy, and Shell Oil. Price was not named as a defendant.
Thoroughbred Energy is a Delaware limited liability company. It is headquartered in Lexington and registered to do business in Kentucky. It owns gas station/convenience stores around the Commonwealth and contracts for the marketing and distribution of fuel. Through its marketing agreement with Motiva Enterprise, LLC (a fully-owned affiliate of Saudi Refining, Inc., headquartered in Texas), Thoroughbred Energy markets and sells Shell Oil product. Thoroughbred Energy leased its Mt. Vernon property to Traxx Management.
Traxx Management is a Kentucky corporation that provides management and related services to retail outlets. Traxx Management leased, operated, and maintained the Mt. Vernon station pursuant to an agreement with Thoroughbred Energy. Traxx Management employed Price as a clerk, and he was supervised by the station's management staff.
Shell Oil is a Delaware corporation. Its U.S. headquarters and principal place of business is in Texas. It has no office, place of business, or managing officer in Fayette County. The Estate's claims against Shell Oil were ultimately dismissed without prejudice.
Shortly after the action was filed, the trial court granted the Estate leave to file a first amended complaint. The Estate alleged that Traxx Management and Thoroughbred Energy failed to conduct operations at the station in a "professional, business-like ethical and moral manner"; failed to ensure that persons upon the premises were "adequately protected from injury"; and failed to assume control over security at the store. The Estate alleged that Traxx Management and Thoroughbred Energy failed to train personnel adequately to handle disputes or disagreements with customers and otherwise failed to keep the station safe for patrons.
On November 26, 2012, the defendants filed a motion to transfer the action to Rockcastle Circuit Court where the incident occurred and most of the witnesses resided. They contended that Fayette Circuit Court was not a proper venue as to Shell Oil and filed an affidavit that indicated that Shell Oil had no employees or agents in Fayette County. The Estate resisted the motion, and it was denied.
On December 20, 2012, Shell Oil filed a motion to dismiss the action against it. At a hearing conducted by the trial court on February 1, 2013, Shell Oil argued that Fayette Circuit Court was not a proper venue for the action against it. Additionally, it presented the court with the marketing agreement showing that it had no franchisor/franchisee relationship with either Traxx Management or Thoroughbred Energy. By order entered on February 7, 2013, the Estate's action against Shell Oil was dismissed without prejudice.
On September 17, 2013, Traxx Management filed a motion for summary judgment. Traxx argued that it was entitled to judgment as a matter of law because Price had not been acting within the scope and course of his employment when he shot and killed Hensley. It also argued that there was no evidence to indicate that it had negligently hired, trained, supervised, or retained Price. The trial court denied the motion on October 14, 2014.
The trial court granted summary judgment in favor of Thoroughbred Energy because it had not been shown that Price was its employee. There was no evidence indicating that Thoroughbred Energy had any role in hiring, training, or supervising him.
Finally, on October 19, 2015, the trial court granted Traxx's motion for partial summary judgment with respect to the Estate's direct liability claims. The decision to grant summary judgment was based (in part) upon Hensley's status as a criminal trespasser.
The first jury trial was conducted in November 2015. Testimony centered on whether Traxx was vicariously liable for Price's actions. Traxx filed timely motions for a directed verdict, which the trial court denied. The trial resulted in a substantial verdict in favor of the Estate. (The jury awarded the estate $7,168.00 in funeral expenses, $395,000.00 for loss of future earnings by Hensley, and $2,000,000.00 in punitive damages.) However, before the jury was discharged, Traxx objected that the verdict was inconsistent.
Traxx contended that the jury's verdict indicated that it had found Price's actions to have been simultaneously negligent and intentional. It argued that the jury had failed to follow the court's written instructions and that the verdict was meaningless in view of the jury's contradictory findings. The jury was discharged without a resolution of this specific issue, and the parties were instructed to file post-trial motions.
Traxx Management filed a timely motion for judgment notwithstanding the verdict. It argued again that the evidence did not support a finding that Price was acting within the scope and course of his employment when he shot and killed Hensley. It also filed a motion for new trial based, in part, upon its contention that the jury's verdict was inconsistent.
In an order entered on March 25, 2016, the trial court granted the motion of Traxx Management for a new trial based primarily on the inconsistency in the verdict because the jury found that Price acted both intentionally and negligently in shooting Hensley. See, e.g. , Ten Broeck Dupont, Inc. v. Brooks , 283 S.W.3d 705, 733 (Ky. 2009) (citing Martin v. Yeoham , 419 S.W.2d 937, 945 (Mo. App. 1967) ("[P]roof that the wrongdoing on the part of the defendant was deliberate would exclude negligence.")). The trial court also addressed numerous other issues in its order.
A second jury trial was conducted in May 2018. Following presentation of the Estate's case, the trial court directed a partial verdict in favor of Traxx. However, it denied Traxx's motion for directed verdict with respect to whether Price had acted within the scope and course of his employment. The trial court instructed the jury, it deliberated, and it reached a verdict. In response to a written interrogatory, the jury indicated that it did not believe from the evidence that Price had "failed to exercise the duty set forth in Instruction No. 3, while acting within the scope of his employment, and that such failure was a substantial factor in causing [Hensley's death]." The trial court dismissed the action. The Estate filed this appeal. Traxx Management filed its cross-appeal.
Having reviewed the facts and the pertinent law, we conclude that Traxx was entitled to judgment notwithstanding the jury verdict rendered in the first trial in 2015. As a result, we need not address many of the issues raised by the Estate concerning the nature of the jury's initial verdict or those issues related to the second trial. We will address the pre-trial dismissals of both Thoroughbred Energy and Shell Oil later in this opinion.
Traxx concedes that it is subject to vicarious liability for a tort committed by its clerk who is acting within the scope of his employment. However, it argues that the act complained of here occurred within the context of an independent course of conduct that was not intended by the clerk to serve any purpose of his employer whatsoever. Price pursued, shot, and killed Hensley only after Hensley made a direct threat against Price and his family as he fled the scene following the robbery. Under these circumstances, we are persuaded that Traxx Management was entitled to judgment notwithstanding the jury's verdict rendered in favor of the Estate. Consequently, we reverse the Fayette Circuit Court's decision to grant a second trial.
In order for an employer to be held responsible to a third party for the tortious act of its employee, "such act must have been committed while the employee was engaged in furthering his employer's business or interests, without any deviation by the employee to a pursuit of his own business or interest...." Wood v. Southeastern Greyhound Lines , 302 Ky. 110, 194 S.W.2d 81, 83 (1946). If an employee deviates from the employer's business, no matter how briefly , to take actions which are not connected with the employer's business, the business relationship is suspended and the employee is not acting within the scope of his employment. Id. (citing 3 C.J.S. Agency, § 255 ). Generally, intentional torts are committed outside the scope of the employment. Booker v. GTE.net LLC , 350 F.3d 515 (6th Cir. 2003).
Corpus Juris Secundum.
In Papa John's International, Inc. v. McCoy , 244 S.W.3d 44 (Ky. 2008), the Supreme Court of Kentucky observed with approval that its predecessor court had held that an employee bus driver did not act within the scope of his employment when he stopped the employer's bus in the middle of the street, left the bus, and assaulted another driver in a road-rage incident. The court noted that the employee's motive had been to settle a personal conflict and not to further his employer's business. As there was no issue of fact, the case was dismissed for failure to state a claim. See Wood, supra.
The Papa John's Court distinguished from the facts before it the case of Frederick v. Collins , 378 S.W.2d 617 (Ky. 1964). In that case, a court concluded that a store clerk had acted within the scope of his employment when he shot and killed a person in a grocery store during what he believed was a robbery. In Frederick , the employee's actions were construed as having been motivated entirely by the employee's obligation and desire to protect the business – his father's grocery store. "There is no evidence that [the clerk] sought to serve any personal purpose in his activity towards [the robber]." Id. at 619.
The Papa John's Court also discussed the case of Patterson v. Blair , 172 S.W.3d 361 (Ky. 2005). In Patterson , the Supreme Court of Kentucky held that an automobile dealership employee had acted within the scope of his employment when he confronted a driver on a public road in an attempt to repossess a vehicle. The dealership's employee demanded that the driver exit the car. When he refused, the employee drew a pistol and shot through the vehicle's tires. On appeal, the decision of the trial court to permit the jury to impute liability to the employer for the employee's actions was affirmed "because [the employee] was acting at all times within the scope of his employment." Papa John's , 244 S.W.3d at 51 (citation omitted).
In its analysis, the Papa John's Court adopted the American Law Institute's Restatement (Third) of Agency § 7.07 (2006), entitled "Employee Acting Within Scope of Employment." It provides, in part, 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.
The Supreme Court of Kentucky noted that this provision is consistent with the standard advanced by Prosser and Keeton in their treatise on tort law: "[I]n general, ... the master is held liable for any intentional tort committed by the servant where its purpose, however misguided, is wholly or in part to further the master's business." Papa John's , 244 S.W.3d at 52 (citing W. Page Keeton, et al., Prosser and Keeton on the Law of Torts 505 (5th ed. 1984)). Thus, if the servant "acts from purely personal motives ... which [are] in no way connected with the employer's interests, he is considered in the ordinary case to have departed from his employment, and the master is not liable." Id. (citation omitted). This approach "conforms to the economic theory of vicarious liability ... because when the employee acts for solely personal reasons, the employer's ability to prevent the tort is limited." Id. (citation omitted).
At the first trial of this matter, Price acknowledged that Traxx had a no-guns policy and that he was not authorized to possess a gun at work. However, Price admitted that he regularly carried a pistol on his person and that even before he had obtained a government permit to carry a concealed weapon, he had kept a handgun in his vehicle for his personal protection. Price testified that he felt that his duties with respect to managing the robbery had ended when the robbery was over.
Price also acknowledged that he had been acting for personal reasons when he stepped outside the store and shot and killed Hensley. Price did not want Hensley to follow through with his threat against his family. The surveillance video shows that when he was confronted by Hensley, Price reached into his trousers pocket to retrieve the keys to the till; it does not appear that he reached for the pistol before Hensley threatened to kill his family and fled the store. When asked whether he had fired the pistol "in defense of yourself, the Shell station, or both?" Price answered unequivocally, "In defense of myself." Price testified that prior to Hensley's threat, he had not considered using the pistol against him.
When a trial court considers a motion for judgment notwithstanding the verdict, it must view the evidence in a light that is most favorable to the opposing party and must give the opposing party every fair and reasonable inference that can be drawn from the evidence. Taylor v. Kennedy , 700 S.W.2d 415, 416 (Ky. App. 1985). However, the trial court must grant judgment notwithstanding the verdict where there is a complete lack of proof on a material issue in the action and the moving party is entitled to judgment as a matter of law. Id. The question of whether an employee's conduct is within the scope of employment is a question of law. Booker , 350 F.3d at 518.
According to Price, he perceived that his duty to serve the interests of the store during the robbery had ended when Hensley fled. His decision to pursue Hensley was made only after the robbery was complete and Hensley threatened him (and his family). After Hensley fled the scene, Price left the store. Hensley was shot and killed some 150 feet from the store. Thus, Price's decision to pursue and to shoot a robber who had left the scene of the crime was not connected to or incidental to the employer's business. At the time of the shooting, Price was acting in his individual capacity and not as a clerk at the station.
Under these circumstances, Traxx had no ability to prevent Price from acting as he did. Price was not acting within the scope of his employment and, consequently, as a matter of law, Traxx could not have been found to be vicariously liable for Price's actions. As Traxx Management was entitled to judgment notwithstanding the verdict, a new trial was not warranted.
Next, the Estate argues that the trial court erred by granting summary judgment to Traxx with respect to the Estate's direct liability claims. The Estate alleged in its complaint that Traxx Management was directly liable for Hensley's death because it had been negligent in its hiring, training, supervision, and/or retention of Price.
In ruling on a motion for summary judgment, a trial court must examine the record to determine if any real or genuine issue of material fact exists. CR 56. Where no genuine issue of material fact exists, summary judgment is appropriate if it appears as a matter of law that it would be impossible for the non-moving party to produce evidence at trial warranting a judgment in its favor.
Kentucky Rules of Civil Procedure.
In Oakley v. Flor-Shin, Inc. , 964 S.W.2d 438 (Ky. App. 1998), we held that a plaintiff may maintain an action for negligent hiring and/or retention if there is evidence that an employer knew or reasonably should have known that an employee was unfit for the job for which he was employed and that the employee's placement or retention at that job created an unreasonable risk of harm to the plaintiff.
In this case, there was no evidence presented to indicate that Traxx Management failed to use ordinary care in hiring or retaining Price nor that hiring or retaining Price created an unreasonable risk of harm to Hensley. Therefore, the trial court did not err by granting summary judgment with respect to these claims.
An employer may also be held liable for the negligent training or supervision of its employees -- but "only if he or she knew or had reason to know of the risk that the employment created." Booker , 350 F.3d at 517 (citing Restatement (Second) of Agency § 213 (1958) ); see also Smith v. Isaacs , 777 S.W.2d 912 (Ky. 1989). There was no evidence presented in this case that indicated that Traxx knew or had reason to know that Price might shoot and kill a criminal off its premises following a robbery. The evidence clearly indicated that Price was aware of his employer's no-weapons policy. And again, his actions were not undertaken in furtherance of Traxx's business interests but instead were taken in an effort to protect himself and his family. We see no basis upon which the Estate could establish a claim of negligent training and supervision. The court did not err in entering summary judgment in favor of Traxx on this claim.
The Estate also argues that the trial court erred by dismissing Shell Oil at the outset of the proceedings. By an order entered on February 7, 2013, the trial court granted the motion of Shell Oil to dismiss the Estate's action against it, without prejudice, based upon improper venue. On appeal, the Estate contends that the court failed to permit sufficient discovery concerning the business relationship between Shell Oil and Traxx Management. We disagree.
KRS 452.450 provides, in relevant part, that an action against "a corporation which has an office or place of business in this state, or a chief officer or agent residing in this state, must be brought in the county in which such office or place of business is situated or in which such officer or agent resides...." If a tort action is brought against the corporation, the action may, in the alternative, be brought in the county in which the tort is committed. Id.
Kentucky Revised Statutes.
Shell Oil presented an affidavit to indicate that it had no office, place of business, chief officer, or agent in Fayette County. It also presented documentary evidence to indicate that the station was not its place of business. The Estate offered nothing to establish that venue was proper in Fayette County.
Observance of proper venue is deeply imbedded in Kentucky law. Fritsch v. Caudill , 146 S.W.3d 926, 927 (Ky. 2004). Improper venue is a ground for a trial court's dismissal of an action under the provisions of CR 12.02(c). However, the provisions of KRS 452.105 permit a trial court to transfer venue from one court to another when it determines that the venue of the selected forum is improper. Nevertheless, it is clear in this case, that the Estate was not interested in transfer of the action to Rockcastle Circuit Court. Indeed, as noted earlier in this opinion, the Estate resisted a motion by the defendants in 2012 to transfer the case from Fayette to Rockcastle County. Under these circumstances, the trial court did not err by dismissing the action without prejudice.
Finally, the Estate contends that the trial court erred by granting summary judgment to Thoroughbred Energy on the basis that it was not Price's employer and did not control Price's actions. We disagree.
Under the undisputed facts of this case, neither Shell Oil or Thoroughbred Energy exercised control over Price's actions following the robbery. Once Hensley fled, Price left his post at the store and pursued him in the interests of Price's own safety and that of his family. This independent act was his alone.
There is no evidence to support the claim that Thoroughbred Energy was liable under any theory related to the condition of the premises. The Estate alleged that Thoroughbred Energy failed to conduct operations at the store in a "professional, business-like ethical and moral manner"; failed to ensure that persons upon the premises were "adequately protected from injury"; and failed to assume control over security at the store. The Estate further alleged that Thoroughbred Energy failed to train personnel adequately to handle disputes or disagreements with customers and failed to keep the station safe for patrons. The trial court did not err by dismissing the action against Thoroughbred Energy because the evidence showed that it played no role in the day-to-day operation of the station or the training or supervision of Traxx's employees.
In conclusion, we reverse the order of the Fayette Circuit Court granting a new trial and remand for entry of an order consistent with this opinion. We affirm the court's pre-trial orders dismissing the Estate's action against Thoroughbred Energy and Shell Oil. We agree with the argument of Traxx's cross-appeal that Traxx was entitled to a judgment notwithstanding the verdict following the first trial. However, that argument is rendered moot because we affirm the judgment dismissing the Estate's wrongful death claim against Traxx Management on that very basis.
ALL CONCUR.