Opinion
NO. 2014-CA-000210-MR
01-09-2015
ROBIN HITE APPELLANT v. C&M SERVICES OF KENTUCKY, INC. D/B/A PAUL DAVIS RESTORATION OF LOUISVILLE APPELLEE
BRIEFS FOR APPELLANT: Thomas J. Schulz Louisville, Kentucky BRIEF FOR APPELLEE: Joseph P. Hummel W. Thomas Rump, IV Louisville, Kentucky
NOT TO BE PUBLISHED APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE A. C. MCKAY CHAUVIN, JUDGE
ACTION NO. 12-CI-002926
OPINION
REVERSING AND REMANDING
BEFORE: CLAYTON, LAMBERT, AND THOMPSON, JUDGES. LAMBERT, JUDGE: Robin Hite has appealed from the summary judgment of the Jefferson Circuit Court dismissing her complaint against C&M Services of Kentucky, Inc. d/b/a Paul Davis Restoration of Louisville (C&M) seeking damages for negligent selection and negligent supervision. We have carefully reviewed the record and the parties' arguments in their briefs, and we reverse the summary judgment entered by the circuit court.
After her residence sustained water damage in August 2011, Hite contacted her homeowner's insurance company, Nationwide Insurance Company, to make a claim. Nationwide sent Matt Nedley from C&M, an approved contractor for Nationwide, to investigate her claim the following month. C&M had been recommended by Nationwide agent Chris Parson to perform the renovation and repair work. On September 21, 2011, Hite entered into a contract with C&M to perform the repairs to her residence.
In January 2012, Hite contacted Louisville Metro Police to report the theft of several pieces of jewelry from her residence. She discovered that additional pieces of jewelry were missing later that month and reported those thefts as well. Through its investigation, Louisville Metro Police determined that Josh Spry, who was on a list of workers that had been inside Hite's home for the repair work, had a pending case against him for manufacturing methamphetamine, dating from May 2011. Further investigation established that Spry had been selling jewelry at local pawn shops. Hite believed that Spry had also damaged an external air conditioning unit at her residence in an attempt to steal the coil from the unit and had also stolen an antique rifle from her attic. Hite stated that Spry had been assigned to clean construction debris in the attic which had been left from roofing repairs performed as part of C&M's renovation and repair of her residence. Spry was later charged with theft by unlawful taking over $500.00 in Jefferson Circuit Court.
On March 24, 2012, Hite filed a complaint against C&M alleging that C&M had failed in its duty to exercise reasonable care in selecting and supervising Spry while he made repairs to her home. She also stated that C&M facilitated Spry's access to her home. Hite sought damages from C&M and a trial by jury. In its answer to the complaint, C&M stated that Hite had failed to join an indispensable party, that her loss was brought about by the criminal acts of a third party for whom it was not responsible, that Spry was an employee of an independent contractor and not under the direction or control of C&M, and that Spry's acts were not in the course and scope of his work related to C&M or for Hite. C&M requested dismissal of Hite's complaint.
Close to a year later, on May 7, 2013, C&M filed a motion for summary judgment, arguing that no genuine issues of material fact existed and that it was entitled to judgment as a matter of law. Citing to the affidavit of Nick Lang, the owner of Lang Property Services, C&M stated that part of the work Hite had contracted with it to perform was subcontracted to Lang Property Services. The two companies operated pursuant to a Tradesman Agreement signed in 2009. Paragraph 12 of the Tradesman Agreement provided that an independent contractor relationship existed between C&M and Lang Property Services, and that Lang Property Services was in business for itself. Spry was employed by Lang Property Services at the time the subcontract work was performed on Hite's property. C&M argued that it was not liable for the tortious conduct of an employee of its subcontractor, an independent contractor. Even if Spry worked for C&M, it could not be liable for the intentional theft because the theft was not in the course and scope of Spry's employment. Therefore, C&M argued that there was no evidence in the record that raised a disputed, material fact and that it was entitled to summary judgment on all of Hite's claims.
In response, Hite argued that C&M failed to establish that it was entitled to summary judgment on the causes of action she raised, negligent selection and negligent supervision, but rather C&M based its motion on respondeat superior, which she had not raised. Relying on her own affidavit, Hite stated that she had not entered into an agreement or contract with Lang Property Services, but Mr. Lang told her that he worked for and would be managing the work for C&M. She gave Mr. Lang a key to her residence for work that would be performed during the day during the week when she was at work. Mr. Lang put the key in a lock box that required a code access number, which he gave to Hite. Mr. Lang, in turn, provided the key code access number to workers who were performing the work when he was not on site. Hite stored her jewelry out of sight in her bedroom, and her bedroom door was closed at all times. No work was performed in her bedroom. After she determined that some pieces of jewelry were missing, she reported the thefts. She stated that there had been no forced entry into her residence during the time of the thefts prior to January 11, 2012. Hite had removed her key from the lock box by that time due to the previous thefts. When she discovered her home had been broken into on January 11, 2012, and that the rest of her jewelry had been stolen, Hite noticed that the lock box had been opened that day by using the key code. Hite concluded that Mr. Lang had provided the access code to Spry, who then used the code to access Hite's home to steal her jewelry.
For her argument, Hite contended that the authorities C&M cited in its motion related to the doctrine of respondeat superior, a cause of action she did not raise in her complaint. Rather, her claims were based on the direct liability of the principal for its own negligence, rather than on the vicarious liability of a principal for the negligence of an agent. She contended that it was the way C&M conducted its business that was at issue in her case. By abdicating its supervision of the activities conducted on its behalf at her residence, Hite argued that C&M was reckless and negligent and therefore subject to tort liability for the resulting harm due to its failure to supervise and by permitting or failing to prevent the tortious conduct. Hite also argued that Mr. Lang's status as an agent was a factual dispute. Hite argued that Mr. Lang was C&M's agent. Finally, she argued that C&M's choice to conduct its business through the agency of an independent contractor did not shield it from liability because it could not delegate away its own obligations. In conjunction with this argument, Hite contended that a special relationship existed to impose the duty.
In reply, C&M asserted that it did not hire Spry; rather, Lang Property Services hired Spry. Therefore, Hite could not maintain an action for negligent hiring and negligent supervision against it.
On January 31, 2014, the circuit court entered an order granting C&M's motion for summary judgment. This appeal now follows.
An appellate court's standard of review in such cases is well-settled in the Commonwealth. "The standard of review on appeal when a trial court grants a motion for summary judgment is 'whether the trial court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law.'" Lewis v. B & R Corp., 56 S.W.3d 432, 436 (Ky. App. 2001), citing Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996); Palmer v. Int'l Ass'n of Machinists & Aerospace Workers, 882 S.W.2d 117, 120 (Ky. 1994); CR 56.03. "Because summary judgment involves only legal questions and the existence of any disputed material issues of fact, an appellate court need not defer to the trial court's decision and will review the issue de novo." Lewis, 56 S.W.3d at 436, citing Scifres, 916 S.W.2d at 781; Estate of Wheeler v. Veal Realtors & Auctioneers, Inc., 997 S.W.2d 497, 498 (Ky. App. 1999); Morton v. Bank of the Bluegrass & Trust Co., 18 S.W.3d 353, 358 (Ky. App. 1999).
Hite frames the issue presented in the appeal as follows: "[w]hether by doing nothing, [C&M] breached its duty to exercise ordinary care in selecting, retaining or supervising persons to conduct its contracting business whereby its access to Hite's dwelling created a foreseeable risk of harm." She contends that this question is a material issue of fact based on the current record. Hite also argues that what C&M should have known or what it did, or should have done, to protect her property is not a question of law, but rather a jury question. That C&M did not employ, hire, or supervise Mr. Spry as well as Lang Property Services' ostensible status as an independent contractor did not obviate C&M's negligence and did not establish the non-existence of a material issue of fact. Rather, whether Mr. Lang was acting as C&M's agent was unclear from the record; Hite believed that Mr. Lang was a representative of C&M based upon his statement to her that he would be managing the work for which she had contracted with C&M. Hite concludes that on the basis of the current record, it is not impossible for her to establish C&M's liability for breach of its duty to guard against foreseeable risks due to the access to her residence.
On the other hand, C&M argues that there is no evidence of record to support Hite's claim that it is liable under a theory of negligent selection or supervision. Lang Property Services was an independent contractor hired by C&M to work on Hite's residence, and Lang Property Services, not C&M, controlled the method, manner, and details of the work. C&M argues that a principal may not generally be held vicariously liable for the conduct of an independent contractor, citing Nazar v. Branum, 291 S.W.3d 599, 606 (Ky. 2009).
However, Hite contends that the issue is whether she reasonably believed that Mr. Lang represented C&M based upon his statements to her, regardless of his employment status. If so, she would have a viable claim. She cites to Williams v. Kentucky Dept. of Educ., 113 S.W.3d 145, 151 (Ky. 2003), as modified (Sept. 23, 2003), in support of her argument:
Under common law principles of agency, a principal is vicariously liable for damages caused by torts of commission or omission of an agent or subagent, other than an independent contractor, acting on behalf of and pursuant to the authority of the principal. And when the principal is under a duty to provide protection for or to have care used to protect others and confides the performance of that duty to a servant or other person who causes harm to them by failing to perform that duty, vicarious liability attaches even if the agent or subagent is not a servant, i.e., is an independent contractor. [Internal citations omitted.]We agree with Hite that a disputed issue of material fact remains regarding whether Mr. Lang was acting as C&M's agent, regardless of the terms of the Tradesman Agreement.
We also agree with Hite that the basis for C&M's motion for summary judgment and the circuit court's ruling did not address Hite's claims regarding C&M's failure to use reasonable care in selecting and supervising its agents. Rather, C&M and the circuit court viewed this case under the doctrine of respondeat superior, and the circuit court based its decision on the fact that C&M had not hired Mr. Spry and that there was no evidence that Mr. Spry had committed any criminal conduct in the course of his employment under an apparent agency theory.
In Ten Broeck Dupont, Inc. v. Brooks, 283 S.W.3d 705, 733-34 (Ky. 2009), the Supreme Court of Kentucky discussed the torts of negligent hiring and retention in conjunction with the doctrine of respondeat superior:
Under Kentucky law, the elements of negligent hiring and retention are: (1) the employer knew or reasonably should have known that an employee was unfit for the job for which he was employed, and (2) the employee's placement or retention at that job created an unreasonable risk of harm to the plaintiff. [Oakley v. Flor-Shin, Inc., 964 S.W.2d 438, 442 (Ky. App. 1998)]. Conversely, in Patterson, we noted:We agree with Hite that disputed issues of material fact remain to be decided by a jury regarding whether C&M breached its duty to her to protect her property while it was working under contract to perform repairs to her residence. The circuit court did not consider whether C&M was negligent in failing to use reasonable care in selecting and supervising its agents. Therefore, we hold that summary judgment under the arguments presented by C&M is premature.
the doctrine of respondeat superior[ ] is not predicated upon a tortuous [sic] act of the employer but upon the imputation to the employer of a tortuous act of the employee by considerations of public policy and the necessity for holding a responsible person liable for the acts done by others in the prosecution of his business, as well as for placing on employers an incentive to hire only careful employees. Ordinarily, an employer is not vicariously liable for an intentional tort of an employee not actuated by a purpose to serve the employer but motivated, as here, solely by desire to satisfy the employees [sic] own sexual proclivities.
[Patterson v. Blair, 172 S.W.3d 316, 369 (Ky. 2005)] citing American Gen. Life & Accident Inc. Co. v. Hall, 74 S.W.3d 688, 692 (Ky. 2002) (emphasis in original). The difference being, "respondeat superior" is based upon the employer/employee relationship and imposes strict liability, whereas claims of negligent hiring/retention focus on the direct negligence of the employer which permitted an otherwise avoidable circumstance to occur. [Emphasis in original.]
Accordingly, we reverse the summary judgment of the Jefferson Circuit Court and remand this matter for further proceedings.
THOMPSON, JUDGE, CONCURS.
CLAYTON, JUDGE, CONCURS IN RESULT ONLY. BRIEFS FOR APPELLANT: Thomas J. Schulz
Louisville, Kentucky
BRIEF FOR APPELLEE: Joseph P. Hummel
W. Thomas Rump, IV
Louisville, Kentucky