Opinion
C.A. No. 05C-10-307 PLA.
Submitted: June 22, 2007.
Decided: September 11, 2007.
Upon Defendants' Harold M. Williams and Yellow Transportation, Inc.'S Motion for Partial Summary Judgment.
Granted in part, Denied in part.
Timothy E. Lengkeek, Esquire, Young Conaway Stargatt Taylor LLP, Attorney for Claude J. and Connie M. Smith.
James M. Lennon, Esquire, Womble Carlyle Sandridge Rice PLLC, Attorney for Harold M. Williams and Yellow Transportation, Inc.
Robert J. Leoni, Esquire, Shelsby Leoni, Attorney for Donald A. Smith.
James P. Hall, Esquire, Phillips Goldman Spence, P.A., Attorney for James F. Ash d/b/a Ash's Construction Co., Inc. Ash's Equipment Rentals, Inc.
Daniel P. Bennett, Esquire, Mintzer Sarowitz Zeris Ledva Meyers LLP, Attorney for Nationwide Mutual Insurance Company.
I. Introduction
Plaintiff Claude J. Smith ("Smith") allegedly suffered injuries as a result of a car accident in which Defendant Harold M. Williams ("Williams") and Smith collided. Yellow Transportation, Inc. ("Yellow") admitted vicarious liability for any damages that Williams may have caused to Smith. Defendants Williams and Yellow (collectively "Defendants") have filed a motion for partial summary judgment seeking to have this court dismiss Smith's claim for punitive damages against Williams and Yellow and to dismiss Smith's direct negligence claims against Yellow.
The Court concludes that Smith has failed to establish a genuine issue of material fact concerning whether Yellow exhibited a conscious disregard for the motoring public when it employed Williams. Therefore, Yellow's alleged actions do not warrant punitive damages. Furthermore, for the reasons discussed hereafter, the Court will allow Smith to proceed with a direct negligence claim against Yellow, despite Yellow's admission of vicarious liability for Williams's conduct. Accordingly, Smith's motion is GRANTED in part and DENIED in part.
II. Statement of Facts
This dispute arises out of two motor vehicle accidents, the first of which involves the Defendants named in this motion. The accident occurred on January 8, 2004 when Smith drove his car southbound on Route 58. At the time of the accident, Williams drove a tractor trailer truck owned and operated by Yellow. As Williams exited the Yellow terminal onto Route 58, he saw Smith's vehicle but assumed he could merge safely. While merging, Williams's truck collided with Smith's car on the front driver side. Although the police were called to investigate no citation was issued. Since there was only minor property damage, both drivers were able to drive from the scene.
Though immaterial for purposes of this motion, the issue of who is at fault with regard to this motor vehicle accident is in dispute. See Docket 172, p. 1. "Docket [#]" refers to the docket number assigned by LexisNexis File Serve.
Smith later filed an action against Williams and Yellow alleging, inter alia, that Williams drove his truck negligently, causing injury to Smith. Yellow admitted vicarious liability for any injury that Williams may have caused as a result of his alleged negligence. Smith also alleged that Yellow negligently hired, supervised, and retained Williams.
Docket 1, p. 2-5.
Docket 172, p. 7.
Docket 1, p. 2-5.
III. Parties' Contentions
Defendants first submit that Williams's conduct was neither wanton, reckless, nor willful in causing the motor vehicle accident, thus precluding any claim for punitive damages. Defendants also argue that Yellow cannot be liable for punitive damages for alleged negligent hiring, retention, or supervision of Williams because Yellow determined correctly that Williams's accident with Smith was minor, Williams's previous accidents generally involved insignificant property damage without serious personal injury, Williams's physicians certified that he was capable of driving a truck pursuant to the Federal Motor Carrier Safety Regulations and Delaware safety regulations, and Williams attended his employer's training and safety meetings.Defendants also contend that Smith should not be precluded from maintaining direct claims against Yellow for negligent hiring, supervision, and retention of Williams. Defendants urge this court to adopt the majority position, which prohibits a plaintiff from proceeding on a direct liability theory where an employer admits respondeat superior liability for a driver's negligence. Defendants further argue that permitting direct negligence claims would result in the presentation of wasteful, irrelevant, and highly prejudicial evidence that would unfairly boost Plaintiff's recovery .
In response, Smith first notes that he seeks punitive damages, not against Williams, but against Yellow alone. Smith argues that there is sufficient evidence for a jury to find that Yellow was reckless in hiring and supervising Williams because Yellow should have been aware of the risk Williams posed to motorists based on his accident history. Smith further points to Yellow's failure to monitor his accident record, Yellow's economic decision not to terminate Williams, and Yellow's failure to mandate remedial driving courses as a basis for his claim for punitive damages.
With respect to the issue of direct negligence claims against Yellow, Smith submits that such claims be permitted even where an employer admits liability for a driver's negligence under respondeat superior. He contends that allowing these claims is in accord with the Delaware Supreme Court's ruling in Fisher v. Townsends, Inc. Finally, Smith notes that denying direct negligence claims where an employer admits vicarious liability would establish undesirable public policy because it would remove an incentive for employers to police their agents so as to prevent negligence.
695 A.2d 53 (Del. 1997).
IV. Standard of Review
When considering a motion for summary judgment, the Court's function is to examine the record to ascertain whether genuine issues of material fact exist and to determine whether the moving party is entitled to judgment as a matter of law. The court must "view the evidence in the light most favorable to the non-moving party." Though certain evidence in isolation may present a triable fact, the Court must view the record as a whole to determine whether a rational trier of fact could find for the non-moving party. Summary judgment will not be granted if, after viewing the record in a light most favorable to the non-moving party, there are material facts in dispute or if judgment as a matter of law is not appropriate. If, however, the record reveals that there are no material facts in dispute and judgment as a matter of law is appropriate, then summary judgment will be granted.
Super Ct. Civ. R. 56(c).
Storm v. NSL Rockland Place, LLC, 898 A.2d 874, 880 (Del.Super.Ct. 2005).
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).
Storm, 898 A.2d at 879.
Id.
"The moving party bears the initial burden of demonstrating that the undisputed facts support his legal claims." If the proponent properly supports his claims, the burden "shifts to the non-moving party to demonstrate that there are material issues of fact for resolution by the ultimate fact-finder."
Id.
Id. at 880.
V. Analysis A. Punitive Damages
Punitive damages serve "to punish the person doing the wrongful act and to deter him, as well as others, from similar conduct in the future." A court may award punitive damages only for wanton, willful, or reckless conduct. Specifically, a defendant's conduct must be "outrageous" because of an "evil motive" or "a conscious indifference to the rights of others." To establish defendant's recklessness, a plaintiff must show that the defendant acted negligently and had a reckless state of mind, such that he must have foreseen or should have foreseen the risk of harm that his conduct would create. Mere inadvertence, mistake, or errors of judgment are insufficient to sustain punitive damages.In such a case as this, where plaintiff argues that the defendant's negligence is based on an error of judgment, "plaintiff's burden is substantial," and plaintiff must show that "the precise harm which eventuated must have been reasonably apparent but consciously ignored in the formulation of the judgment." For example, in Jardel Co., Inc. v. Hughes, the Delaware Supreme Court held that a defendant was not reckless in failing to hire additional security for his mall, even though the defendant may reasonably have been on notice of crime in the area, because an incident of such magnitude had not been reported in the previous thirteen months and no other customers had been seriously injured. The court also noted that an economic decision not to employ more guards may justify punitive damages only if "the economic cost is intentionally weighed against a perceived risk which includes the reasonable likelihood of the harm which occurred."
Id. at 531.
523 A.2d 518 (Del. 1987).
Jardel Co., Inc., 523 A.2d at 531.
Id.
Similarly, the court in Eby v. Thompson held that the defendant railroad company was not reckless in failing to repair a large pothole at a company-owned railroad crossing that caused a motor vehicle accident. The defendants had inspected the pothole and decided to watch it, rather than fix it immediately, to determine if it would become a safety risk. The court noted that the decision, while possibly wrong, was free of an egregious intention or conscious disregard for the public.
2005 WL 486850 (Del.Super.Ct. Mar. 2, 2005).
Eby, 2005 WL 486850 at *5.
Id.
In contrast, this Court, in Angelo v. Dean, refused to consider the appropriateness of punitive damages at the summary judgment stage. In that case the defendant driver who was involved in an accident with plaintiff, told the police officer that she had been mentally and physically sick but made the conscious choice to driver to prove to her husband that she was able to operate a car. The Court noted that, although her statement alone would not establish recklessness sufficient to justify punitive damages, the defendant's state of mind was still in issue at the summary judgment stage.
1982 WL 172857 (Del.Super.Ct. Dec. 6, 1982).
Angelo, 1982 WL 172857 at *1.
Id.
Similarly, in Elliott v. Jewell, the defendant ignored a sign indicating a blind, sharp curve ahead, and while driving at a rate of 70-75 miles per hour, smashed his car into plaintiff's car. The judge refused to preclude punitive damages, noting that there were sufficient facts, taken as a whole, that could permit a jury to find that the defendant acted with a conscious indifference to the motoring public.
1997 WL 364051 (Del.Super.Ct. Apr. 23, 1997).
Id.; see also Maguire v. Leggio, 280 A.2d 723, 725 (Del. 1971) (finding that defendant's conduct in accelerating quickly and causing a motor vehicle death could be found wanton because of the surrounding circumstances, including the nature of the traffic on this highway, the heavy rain, the admonitions of the two passengers to slow down despite which [the defendant] continued to increase the speed, [and] his action of spinning the wheels").
In this case, Smith has identified isolated pieces of evidence that may suggest recklessness but, when viewed as a whole, indicate that Yellow's conduct was not outrageous because of an evil motive or conscious indifference to others' rights. Though Smith argues that Yellow was reckless because it failed to monitor the fact that Williams had 39 prior accidents, most of these involved "bumping property in tight quarters" and do not suggest that Williams posed a danger to other drivers. Moreover, only one of Williams's preventable accidents was major, and none of his previous accidents resulted in serious physical injury. Just as in Jardel, but unlike the defendant in Angelo, who knew of the danger her conditions posed to other drivers, Yellow could not have been expected to have anticipated an accident of this magnitude given, Williams's previous history. Moreover, unlike the defendant in Elliot, who ignored all warning signs of a curve and sped into it, Yellow exhibited a concern for public safety by meeting with its team members to discuss Williams's driving and possible termination, holding regular safety meetings, and offering driver training courses which Williams attended. Thus, at no time did Yellow exhibit any conduct that this Court could call "outrageous" or "evil minded."
Jardel Co., Inc., 523 A.2d at 530.
Docket 172, p. 6.
Id., Ex. 5.
Smith also argues that the decision not to terminate Williams on prior occasions warrants punitive damages because Yellow based its decision on economic rather than public safety considerations. Though Daniel Wachhaus, Yellow's Labor Relations Manager, acknowledged the economic implications of terminating Williams, the company also considered the circumstances of the accident and Williams's honesty in reporting it.
An economic decision may only be the basis for punitive damages if "the economic cost is intentionally weighed against a perceived risk which includes the reasonable likelihood of the harm which occurred." Jardel Co., Inc., 523 A.2d at 531.
Smith relies upon deposition testimony from Daniel Wachhaus, Yellow's Labor Relations Manager, who testified, "[W]e didn't believe that if we were to terminate him, that we would successfully be able to uphold that termination in front of a grievance panel,. . . and. . . that the likelihood would be that he would be reinstated . . . with some portion of back pay. . . ." Docket 197, Ex. 8. Wachhaus, however, explained that Yellow not only considered the economic implications of terminating Williams but also considered that Williams's 2001 accident involved a single vehicle with no injuries or citations, Williams had a long length of service for Yellow, and Williams was honest when he told Yellow that "he made a mistake by reaching for his cell phone and taking his eyes off the road." Id. Moreover, Wachhaus explained that Yellow considered Williams's previous nine month driving record before making the decision not to terminate him. Id.
There is no evidence to suggest that Yellow intentionally weighed economic factors against the possible risk Williams posed. Similarly, Wachhaus's testimony establishes that Yellow's decision not to terminate Williams was not in any way based on a conscious indifference to others.
Smith also relies on testimony from David Stopper, an expert on federal regulations and industry standards on driver retention. Stopper testified that Yellow's decision to retain Williams was "extremely if not grossly negligent" because Yellow should have known that Williams would likely cause an accident. Even accepting this statement as true, it is undisputed that Williams was a licensed driver, who had complied with all Federal and Delaware safety regulations, passed all required physical exams, and was certified to drive by a physician. Like the defendant in Jardel, who hired security, Yellow also made an effort to educate its drivers, including Williams, through regular safety meetings. Although Yellow could have implemented additional mandatory training sessions or effectuated a better monitoring system of Williams's record, in my opinion, no rational trier of fact could find Yellow's conduct in failing to monitor a licensed and certified driver, who had never been involved in a major accident, to be outrageous, evil minded, or indicative of a conscious disregard for public safety. At most, Yellow made an error in judgment in failing to monitor Williams more closely, but this decision was free of any intentional or conscious disregard for public safety.
Id., Ex. 5.
See Eby, 2005 WL 486850 at *5.
The Court is thus convinced that Smith has failed to meet the substantial burden of establishing that Yellow exhibited that degree of recklessness required for an award of punitive damages. Viewing the evidence in a light most favorable to the Plaintiff, the Court concludes that Yellow's conduct was not outrageous. There being no genuine issue of material fact about whether Yellow was reckless in its supervision of Williams, Smith's punitive damages claim is therefore dismissed.
B. Plaintiff's Direct Negligence Claims Against Yellow
As far as this Court can tell, Delaware Courts have not yet addressed whether a plaintiff may proceed with a direct negligence claim against an employer when the employer has admitted respondeat superior liability. Courts throughout the country are divided on this issue.
The majority view, which Defendants urge this Court to adopt, precludes a plaintiff from proceeding on a direct negligence claim for negligent hiring once the defendant admits vicarious liability. Under this view, negligent hiring is merely one means by which to impute respondeat superior liability. The rationale for this position is that admission of evidence for negligent hiring would prejudice the defendant, waste judicial resources, and result in a greater percentage of fault attributable to the employer than to the employee. In McHaffie v. Bunch, for example, McHaffie was a passenger in a car driven by Bunch. McHaffie was injured when Bunch's car was hit by a truck driver. McHaffie sued both the driver and his employer, Bruce Transport and Leasing, under both the theory of vicarious liability and the theory of negligent hiring and supervision. The Missouri Supreme Court noted that an employer may be vicariously liable under a negligent hiring theory only if "the employer knew or should have known of a particular dangerous proclivity of an employee followed by employee misconduct consistent with such dangerous proclivity by the employee." Once an employer admits vicarious liability and is liable for the employee's negligence, however, admission of evidence related to the negligent hiring claim would waste judicial resources, create prejudice to the defendant, and insert irrelevant issues for a jury to consider.
See, e.g., McHaffie v. Bunch, 891 S.W.2d 822 (Mo. 1995); Neff v. Davenport Packing Co., 268 N.E.2d 574 (Ill.App.Ct. 1971); Cole v. Alton, 567 F. Supp. 1084 (N.D. Miss. 1983); Elrod v. G R Consrt. Co., 628 S.W.2d 17 (Ark. 1982); Armenta v. Churchill, 267 P.2d 303 (Cal. 1954); Clooney v. Geeting, 352 So. 2d 1216 (Fla.Dist.Ct.App. 1977); Willis v. Hill, 159 S.E.2d 145 (Ga.Ct.App. 1967), rev'd on other grounds, 161 S.E.2d 281 (Ga. 1968); Wise v. Fiberglass Sys., Inc., 718 P.2d 1178 (Idaho 1986); Ledesma v. Cannonball, Inc., 538 N.E.2d 655 (Ill.Ct.App. 1989); Houlihan v. McCall, 78 A.2d 661 (Md. 1951).
McHaffie, 891 S.W.2d at 824.
Id. at 825.
Id. at 826.
The minority view, which Smith urges this Court to adopt, permits a plaintiff to pursue a direct negligence claim against an employer who admits that the employee acted within the scope of his employment, in addition to a claim under respondeat superior. Under this view, negligent hiring, retention, and supervision are separate bases for a claim unrelated to an employee's negligence. For example, in Poplin v. Bestway Express, Poplin collided with Billau, an agent of Bestway, who admitted vicarious liability for Billau's accident. Poplin filed claims for negligence and negligent entrustment, hiring, supervision, and retention against Bestway. The Poplin court adopted the minority position, noting that a negligent hiring and supervision claim does not "rest on the employer-employee relationship, but rather involve[s] the employer's own negligence in entrusting, hiring, supervising, training, or retaining an employee with knowledge, either actual or constructive, that the employee posed a risk of harm to others. . . ." The court also addressed the evidentiary concerns underlying the majority position, noting that the trial court could offer limiting instructions to reduce the prejudice to the defendant or bifurcate the trial to eliminate any prejudicial effect of the evidence of negligent entrustment.
See, e.g., Marquis v. State Farm Fire Cas. Co., 961 P.2d 1213, 1225 (Kan. 1998); Lorio v. Cartwright, 768 F. Supp. 658 (N.D. Ill. 1991); Quinonez v. Anderson, 696 P.2d 1342 (Ariz.Ct.App. 1984); Lim v. Interstate Steel Sys. Div., Inc., 435 N.W.2d 830 (Minn.Ct.App. 1989); Clark v. Stewart, 185 N.E. 71 (Ohio 1933).
286 F. Supp. 2d 1316 (M.D. Ala. 2003).
Poplin, 286 F. Supp. 2d at 1319 (citations omitted).
Id. at 1320.
In this case, Defendants argue that the Delaware Supreme Court would likely adopt the majority position because its main rationales apply here: (1) direct negligence claims would not increase the amount of compensatory damages available to the plaintiff when the employer admits agency; and (2) direct negligence claims would allow a jury to consider prejudicial and irrelevant evidence, which could potentially cloud its determination of fault. Smith, on the other hand, submits that adopting the minority position would keep employers accountable to the public. Smith also relies on Fisher v. Townsends, Inc. to support his claim that Delaware courts permit direct negligence claims and vicarious liability claims. In Fisher, Fisher sued Townsends, alleging vicarious liability and negligent hiring of Reid after Reid, an employee of Townsends, injured Fisher in a car accident. At issue in that case was whether Reid was an employee (such that respondeat superior would apply to Townsends) or an independent contractor. The Delaware Supreme Court made no mention in that case of whether a negligent hiring claim would be barred if Townsends admitted agency. Smith therefore suggests that Delaware courts permit both respondeat superior and direct negligence claims.
695 A.2d 53 (Del. 1997).
Fisher, 695 A.2d at 56-57.
Id. at 55.
Id. at 57.
Other Delaware cases have permitted similar claims. For example, in Hitchens v. Cannon Cannon, Inc., this Court permitted the plaintiff to assert both vicarious liability and a negligent hiring claim. Though the Court dismissed the negligent hiring claim because the plaintiff could not offer sufficient evidence to establish defendant's negligent hiring, this Court suggested that both claims would be viable had there been sufficient evidence.
1988 WL 130414 (Del.Super.Ct. Nov. 21, 1988).
Hitchens, 1988 WL 130414 at *1-*3. Specifically, the Hitchens court explicitly stated "In the absence of any circumstances existing prior to plaintiff's injury which might have indicated to Cannon that Parry was not a fit employee, a claim of negligent hiring against Cannon must fail." Id. at *3.
Since the issue comes to this Court on a motion for summary judgment, and since Delaware courts have shown a willingness to entertain both causes of action, this Court is persuaded that Smith may proceed with a direct negligence claim against Yellow, in addition to a respondeat superior claim, even though Yellow has admitted vicarious liability. Viewing the evidence in the light most favorable to the non-moving party, Smith has shown that: (1) Yellow never required remedial training for Williams's past accidents until one year after the instant accident; (2) Yellow employees failed to monitor Williams's driving record; (3) Yellow decided not to terminate Williams because of the costs involved; and (4) Yellow failed to institute a procedure to determine whether employees actually attended required safety meetings or to discipline employees who did not attend. As noted by the Poplin court, Smith's negligent hiring claim does not rest on any relationship between Williams and Yellow, but involves only Yellow's own alleged negligence. If established at trial and accepted by the jury, this evidence could lead a reasonable juror to believe that Yellow negligently hired, supervised, and retained Williams.
Poplin, 286 F. Supp. 2d at 1319 (citations omitted).
Moreover, Yellow's concerns do not persuade this Court to adopt the majority position. The evidence of Yellow's negligent hiring and supervision, if proved and accepted by the jury, would establish a separate basis for Smith to recover, independent of Williams's accident for which Yellow may be liable. Specifically, under a respondeat superior theory, Yellow would be liable for any negligence related to Williams's accident with Smith. Under a direct negligence theory, Yellow would be liable for any negligence of its employees in monitoring Williams, which would be wholly unrelated to Williams's accident. Moreover, because these are separate claims, permitting Smith to assert both would not waste judicial resources or allow irrelevant evidence to be presented at trial. As noted by Smith, a direct negligence claim, if successful, would hold Yellow accountable in its hiring and retention of drivers. To the extent that Smith attempts to introduce unduly prejudicial evidence against Defendants, the Court can issue a limiting instruction or sever the trial if necessary.
Delaware Rule of Evidence 105 mandates that the court, upon request, restrict evidence that is admissible for one purpose but not admissible for another purpose by giving a limiting instruction to the jury, subject to Delaware Rule of Evidence 403. D.R.E. 105; D.R.E. 105 cmt.
See Super. Ct. R. Civ. P. 42(b) ("The Court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any claim. . . .").
Accordingly, this Court adopts the minority position, which will allow Smith to proceed with a direct negligence claim in addition to his respondeat superior claim.
VI. Conclusion
For all of the foregoing reasons, the Court holds that Williams and Yellow did not exhibit sufficient recklessness for an award of punitive damages. With respect to Smith's assertion of a direct negligence claim against the Defendants the Court will allow such a claim to proceed, even in the face of Defendants' admission of vicarious liability. Accordingly, Williams's and Yellow's motion for partial summary judgment is GRANTED in part and DENIED in part.
IT IS SO ORDERED.
Original to Prothonotary