Opinion
No. COA12–1553.
2013-05-21
Tammy and Lester WATTS, Plaintiffs, v. Clarence Woodrow BELL, Jr., individually and in his capacity as General Manager of American General Financial Services, Inc., and American General Financial Services Inc., d/b/a American General Finance, Defendants.
Fosbinder Law Office, by Julie H. Fosbinder, and The Law Office of Mark N. Kerkhoff, PLLC, by Mark N. Kerkhoff, for plaintiffs-appellants. Ogletree, Deakins, Nash, Smoak & Stewart, P.C., by Robert A. Sar and J. Allen Thomas, for defendant-appellee American General Financial Services, Inc.
Appeal by plaintiffs from order entered 21 September 2011 by Judge Theodore S. Royster, Jr. in Iredell County Superior Court. Heard in the Court of Appeals 22 April 2013. Fosbinder Law Office, by Julie H. Fosbinder, and The Law Office of Mark N. Kerkhoff, PLLC, by Mark N. Kerkhoff, for plaintiffs-appellants. Ogletree, Deakins, Nash, Smoak & Stewart, P.C., by Robert A. Sar and J. Allen Thomas, for defendant-appellee American General Financial Services, Inc.
MARTIN, Chief Judge.
Plaintiffs Tammy and Lester Watts filed suit against defendants Clarence W. Bell, Jr. (“Bell”) and his employer, American General Financial Services, Inc. (“defendant AGFS”) alleging liability for battery, intentional infliction of emotional distress, and loss of consortium as to plaintiff Lester Watts. The trial court granted defendant AGFS' motion for summary judgment on 21 September 2011. After plaintiffs entered into a “Limited Release and Covenant Not to Enforce Judgment against Individual Defendant” with regard to defendant Bell, the trial court entered an order certifying the case for immediate appeal. After careful consideration, we affirm the grant of summary judgment in favor of defendant AGFS.
Tammy Watts and her husband, Lester Watts, jointly own and operate a small janitorial business called Watts Enterprises. Watts Enterprises has had only two customers to the dates relevant to this case: a church, and through Jantize, a janitorial company which subcontracts cleaning services to independent contractors, the Mooresville office of defendant AGFS. Mrs. Watts personally cleaned defendant AGFS' Mooresville office three days a week after the office closed for business, for about forty-five minutes each time. Bell, the branch manager, was often present while Mrs. Watts cleaned the office.
On 27 March 2009, Mrs. Watts told her husband that Bell touched her inappropriately a few days earlier on 23 March 2009. Although Mrs. Watts had never told anyone else about any problem with defendant Bell prior to this incident, she alleges Bell's inappropriate behavior had been going on for about two years. Mrs. Watts contacted the Iredell County Sheriff's office and the Mooresville Police Department to report Bell's inappropriate conduct. The police asked Mrs. Watts to wear a hidden microphone while cleaning on 6 April 2009 to attempt to obtain audio evidence. Police waited outside defendant AGFS' branch office in an unmarked vehicle and listened as Mrs. Watts cleaned the office. The tape recording captured Mrs. Watts telling Bell repeatedly to “stop it,” and discussing when he “pulled [her] over in the corner” previously, which made “marks on [her] arm.” After hearing this exchange:
Watts: Some of the places you touch me is [sic] not right.
Bell: I know.
Watts: Why you do it for? [sic]
Bell: You turn me on.
Watts: What?
Bell: I said you might turn me on....
Mrs. Watts left the office and Captain Thompson of the Mooresville Police Department entered the office to confront Bell. Captain Thompson told Bell that he was going to be arrested for sexual battery and explained the elements of the crime to him as “unwanted touching for the purpose of arousal.” Bell remarked that he had not had sex with Mrs. Watts, but admitted “well, I guess I'm guilty of that” after hearing the elements of sexual battery. Captain Thompson did not arrest Bell at that point; the next day Bell turned himself in to police and he was arrested.
That same night, 6 April 2009, Captain Thompson attempted to contact Bell's supervisors Gerald Absher and Jerry Ridenhour to inform them about the incident. Unable to reach Absher, Captain Thompson left him a message, but spoke with Ridenhour. Captain Thompson told Ridenhour he had been at the Mooresville branch office that day, that Bell “was ultimately going to be charged with two counts of assault on a female, two counts of sexual battery, and that he had sexually assaulted Tammy Watts who was the cleaning person.” He also informed Ridenhour that the incident had been recorded on audiotape.
Following receipt of the information, defendant AGFS investigated the incident. Bell remained in his position with defendant AGFS during the investigation, but Jantize was instructed to send someone other than Mrs. Watts to clean the office. On 1 October 2009, Bell was convicted of two counts of sexual battery and two counts of assault on a female. Defendant AGFS suspended Bell from employment on 8 October 2009. After a review by the Termination Review Committee, Bell was fired on 29 October 2009 for “misconduct” and because “management lost trust in [his] abilities to carry out [the] job.” Although Bell continued to proclaim his innocence and appealed his conviction to superior court, he ultimately pled guilty to the assault on a female charges.
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On appeal, plaintiffs contend the trial court erred by granting defendant AGFS' motion for summary judgment on the theory of vicarious liability. Specifically, plaintiffs argue defendant AGFS is responsible for Bell's wrongdoing because (I) it occurred within the scope of his employment and (II) it ratified Bell's conduct by failing to take disciplinary action against Bell for six months despite knowing all the material facts.
“Our standard of review of an appeal from summary judgment is de novo; such judgment is appropriate only when the record shows that ‘there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.’ “ In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008) (quoting Forbis v. Neal, 361 N.C. 519, 524, 649 S.E.2d 382, 385 (2007)). For an employer to be held liable for the conduct of an employee when there is no express authorization, the employee must either be acting within the scope of his employment or the employer must have ratified the employee's wrongful conduct. See Hogan v. Forsyth Country Club Co., 79 N.C.App. 483, 491, 340 S.E.2d 116, 121,disc. review denied, 317 N.C. 334, 346 S.E.2d 140–41 (1986).
I.
Plaintiffs contend the trial court erred by granting defendant AGFS' motion for summary judgment in that Bell's misconduct occurred within the scope of his employment because Bell, as branch manager, was involved in all the daily operations of the branch office, including the supervision and hiring of Mrs. Watts. Specifically, plaintiffs assert that Bell would assault Mrs. Watts under the guise of taking her into the bathroom to discuss ordering cleaning supplies or showing her how to operate the thermostat.
For an employee's wrongful act to be done in the scope of his employment, it must be “in furtherance of the principal's business and for the purpose of accomplishing the duties of his employment.” Mercier v. Daniels, 139 N.C.App. 588, 592, 533 S.E.2d 877, 880 (2000). “If an employee departs from that purpose to accomplish a purpose of his own, the principal is not liable.” Troxler v. Charter Mandala Ctr., 89 N.C.App. 268, 271, 365 S.E.2d 665, 668,disc. review denied,322 N.C. 838, 371 S.E.2d 284 (1988). Intentional torts are rarely deemed to be in the scope of an employee's employment. Medlin v. Bass, 327 N.C. 587, 594, 398 S .E.2d 460, 464 (1990).
This Court has considered similar cases involving sexual harassment and assault in the workplace and has determined that even if the wrongdoer was performing functions of his job at the time of the assault, it was not within the scope of his employment. See, e.g., Stanley v. Brooks, 112 N.C.App. 609, 613–14, 436 S.E.2d 272, 275 (1993) (holding a car salesman who sexually assaulted a customer during a test drive was not acting in the scope of his employment), disc. review denied, 335 N.C. 772, 442 S.E.2d 521 (1994); Brown v. Burlington Indus., Inc., 93 N.C.App. 431, 437, 378 S.E.2d 232, 235 (1989) (holding there was no evidence that a manager was acting in the scope of his employment and in furtherance of the company's business when he sexually harassed plaintiff employee), cert. granted, 325 N.C. 704, 387 S.E.2d 55,disc. review improvidently allowed,326 N.C. 356, 388 S.E.2d 769 (1990).
Here, even though the nature of Bell's management position put him in a position of control, we do not believe his actions could be in any way interpreted as being in furtherance of defendant AGFS' business or for the purpose of accomplishing his job as manager. Rather, as in Hogan, we believe Bell “was acting in pursuit of some corrupt or lascivious purpose of his own.” Hogan, 79 N.C.App. at 492, 340 S.E.2d at 122. Therefore, we reject plaintiffs' argument that Bell's conduct was in the scope of his employment.
II.
Plaintiffs next contend there is a genuine issue of fact as to defendant AGFS' intention to ratify Bell's wrongful conduct because defendant AGFS had all the material facts but failed to terminate Bell for six months after the incident while indirectly “firing” Mrs. Watts.
To show that “the wrongful act of an employee has been ratified by his employer, it must be shown that the employer had knowledge of all material facts and circumstances relative to the wrongful act, and that the employer, by words or conduct, shows an intention to ratify the act.” Hogan, 79 N.C.App. at 492, 340 S.E.2d at 122. A principal has knowledge of all the material facts and circumstances when he “has such information that a person of ordinary intelligence would infer the existence of the facts in question....” Carolina Equip. & Parts Co. v. Anders, 265 N.C. 393, 401, 144 S.E.2d 252, 258 (1965). “[I]f the purported principal is shown to have knowledge of facts which would lead a person of ordinary prudence to investigate further, and he fails to make such investigation, his affirmance without qualification” can be considered evidence of ratification. Watson v. Dixon, 130 N.C.App. 47, 53, 502 S.E.2d 15, 20 (1998) (internal quotation marks omitted), reh'g on other grounds, 132 N.C.App. 329, 511 S.E.2d 37 (1999), aff'd, 352 N.C. 343, 532 S.E.2d 175 (2000).
After first learning of the incident the following evening from Captain Thompson, Ridenhour contacted Senior Director of Operations George Roach and Director of Field Human Resources Carrie Elliott via email on 7 April 2009. In Ridenhour's initial email, he relayed the information he received from Captain Thompson:
Last night I received a call from Captain Thompson with the Mooresville Police Dept. He advised me that BM Butch Bell would be charged with sexual assault against the cleaning lady who cleans our branch office.
Thompson said they wired the cleaning lady after several complaints she had made to them regarding BM Bell's sexual harassment. Last night she went in and they got Bell on tape making unwelcome advances.... Right after she left, the police came in and charged Bell with sexual assault. Thompson told me Bell would be allowed to come down to the police station on his own to be arrested and released.
Captain Thompson did not tell Ridenhour, however, about Bell's “admission” that he was “guilty of that,” in response to being told the elements of sexual battery on the day of the incident.
Ridenhour personally visited the Mooresville branch office the day following the incident, 7 April 2009. While there, Ridenhour interviewed each employee present individually and obtained written statements from two of them. Sue Steveson, an employee at the branch, told Ridenhour that “Watts flirts a lot with [Bell] and often wears revealing clothing.” Beth McFarland, another employee, stated that she had never “seen or witnessed any behaviors that may be an issue with [Bell]” although he makes comments “at times” “without thinking” “that could be considered inappropriate.” When pressed for an example, McFarland stated one time Bell said, “[t]hat branch office is completely staffed by women—no offense, ladies.” Ridenhour also spoke with Bell and instructed him to write down what had happened. At this point, Ridenhour told Bell to instruct Jantize to send another cleaning person until the dispute was resolved.
Later, on 8 April 2009, Ridenhour sent another email to his superiors updating them that Captain Thompson “ran a criminal background check against Bell and it was clear.” He also informed them that Bell said the “hearing will be in approximately 6 months; if it should go to trial, it may be two to three years before the case is heard.”
At that point, District Manager Gerald Absher and Carrie Elliott took over the investigation. Absher personally visited the Mooresville branch the week after the incident to perform a Quality Control Review (“QCR”), which he does about twice a year. Absher spent the week at the branch, where he talked to all staff members one-on-one and looked at business records. Absher testified that he was most concerned with questioning the employees to see if they felt safe. All the employees at the Mooresville branch told defendant AGFS supervisors that they felt safe in the branch. After the QCR showed no apparent problems with Bell and the other branch employees, the decision was made to wait to take disciplinary action until the trial was over, since it appeared as though the truth of the allegations would be determined by the judicial system “real quick.” Absher was also concerned that if the company fired Bell prior to trial when the charges were just “allegations,” the company would be vulnerable to a lawsuit. In the interim, Absher checked in with the branch periodically and ran internet searches regularly to check for updates.
After Bell's trial, more information came out, most notably that the police had pictures of bruising on Mrs. Watts's arm. An employee of defendant AGFS attended the hearing and described the contents of the audio tape as “really bad.” Defendant AGFS did not know the contents of the audio tape prior to trial and could not obtain a copy of it or of the police report beyond the first page until that point. Follow up interviews with branch employees confirmed that the incident was becoming a distraction at the office and, although they denied it before, that Bell had made a few prior sexist remarks. At this point, Ridenhour, Absher, and Elliott decided to terminate Bell. He was suspended on 8 October 2009 and eventually terminated on 29 October 2009.
While Hogan held that a manager's actions in retaining a wrongdoer, declining to intervene to prevent future offensive behavior, and ultimately terminating the victim of harassment together is enough evidence to submit the issue of ratification to the jury, 79 N.C.App. at 492–93, 340 S.E.2d at 122, this Court has held that retention of an accused employee, “standing alone, cannot be sufficient to find a ratification” because to hold otherwise would force employers “to choose between terminating every employee against whom a complaint is filed ... or to risk ratifying the employee's conduct.” Hughes v. Rivera–Ortiz, 187 N.C.App. 214, 222–23, 653 S.E.2d 165, 171,aff'd in part and disc. review improvidently allowed, 362 N.C. 501, 666 S.E.2d 751 (2008). Although Bell was not immediately terminated, defendant AGFS did a significant amount of investigation and supervised Bell closely during the period beginning when they were told about the incident until his trial. Moreover, defendant AGFS instructed Jantize to send a different cleaning person so as to safeguard against another incident or a confrontation between Bell and Mrs. Watts. We hold that the steps taken to investigate the incident, i.e., the extensive interviews conducted and visits made to the branch, do not indicate an intention to ratify Bell's wrongful conduct and therefore, unlike in Hogan, there is not sufficient evidence of ratification to create a genuine issue of material fact.
Affirmed. Judges BRYANT and DAVIS concur.
Report per Rule 30(e).