#24710-aff in pt & rev in pt & rem-DG
2008 SD 107
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
* * * *
JAMES SCOTT KIRLIN
and KRISTIN KIRLIN, Plaintiffs and Appellants,
v.
KIM HALVERSON, Defendant,
KELLY CAWTHORNE, and PKJ,
INC., d/b/a EMPIRE HVAC, Defendants and Appellees.
* * * *
APPEAL FROM THE CIRCUIT COURT OF
THE SECOND JUDICIAL CIRCUIT
MINNEHAHA COUNTY, SOUTH DAKOTA
* * * *
HONORABLE WILLIAM J. SRSTKA, JR.
Judge
* * * *
N. DEAN NASSER, Jr.
Nasser Law Offices, PC
Sioux Falls, South Dakota Attorneys for plaintiffs
and appellants.
MICHAEL L. LUCE
Luce Law Office
Sioux Falls, South Dakota Attorney for defendants and
appellees Kelly Cawthorne and
PKJ, Inc., d/b/a Empire HVAC.
DANIEL K. BRENDTRO
Sioux Falls, South Dakota Attorney for defendants and
appellees Kelly Cawthorne and
PKJ, Inc. d/b/a Empire HVAC.
* * * *
ARGUED APRIL 22, 2008
OPINION FILED 11/05/08
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GILBERTSON, Chief Justice
[¶1.] On August 31, 2005, plaintiff James Scott Kirlin (Kirlin) commenced a
lawsuit in the South Dakota Second Judicial Circuit for personal injuries and other
losses against defendants Kim Halverson (Halverson), Kelly Cawthorne
(Cawthorne) and PKJ, Inc. d/b/a Empire HVAC (PKJ) resulting from an assault
that Halverson perpetrated upon Kirlin. Kirlin’s wife, plaintiff Kristin Kirlin,
concurrently commenced an action against the defendants for loss of consortium.
The Kirlins’ claims against Cawthorne and PKJ, Inc. alleged liability based on
alternative theories of respondeat superior, civil conspiracy, and negligence.
Cawthorne and PKJ moved for summary judgment. The circuit court granted their
motion and we affirm in part, reverse in part and remand.
FACTS AND PROCEDURE
[¶2.] Cawthorne worked in the heating, ventilation and air conditioning
(HVAC) business in Sioux Falls, South Dakota. Cawthorne, his wife, Pamela
Cawthorne, and father, John Cawthorne were equal shareholders in PKJ and
operated an HVAC business through that entity. Cawthorne managed the
operations of the business. By the spring of 2005, PKJ had been in business for
about 15 years and serviced approximately 580 accounts in Sioux Falls. One of
those accounts was the Empire Mall where PKJ was the principal HVAC service
provider.
[¶3.] By the spring of 2005, Cawthorne learned that the Macerich
Corporation, owner of the Empire Mall, was reevaluating its HVAC servicing
arrangements. Macerich entered into a nationwide contract with Carrier
Commercial Services (Carrier) for HVAC maintenance at its retail malls, including
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the Empire Mall. There is some disagreement between the parties as to the precise
moment at which Cawthorne learned that PKJ had lost its contract with Macerich.
However, it is clear that Cawthorne and PKJ were aware Carrier had secured the
contract to do work previously performed by PKJ at the Empire Mall by the time of
the events relevant to this lawsuit.
[¶4.] On June 15, 2005, Cawthorne was atop the Empire Mall performing
duct maintenance when he spotted Kirlin, wearing a Carrier uniform, working on
an HVAC unit. Cawthorne was admittedly incensed upon seeing a Carrier
employee performing work that for the previous 15 years had been performed by
PKJ. He “just felt compelled to go over there and ask him who he was and what
was he doing.” Kirlin testified during his deposition that as soon as he told
Cawthorne that he worked for Carrier and that he was performing maintenance on
the HVAC units, Cawthorne “immediately started yelling obscenities at me . . . .”
Kirlin stated that he tried to settle Cawthorne down and that he extended his hand
to Cawthorne in an attempt to shake hands. At this point, Cawthorne batted
Kirlin’s hand away and continued to berate him.
[¶5.] Eventually, Kirlin called the Empire Mall operation’s manager, Tim
Kelly (Kelly), to come up and “defuse the situation . . . .” Kelly told Cawthorne that
he was to stay away from Kirlin and leave him to his work. Cawthorne was made
aware that Kirlin, who came from Omaha, Nebraska to service the HVAC units,
would be at the Empire Mall for several more days performing maintenance.
[¶6.] On the following day, June 16, 2005, Cawthorne assigned Halverson to
the Empire Mall to continue the duct maintenance. Halverson had been employed
by PKJ for about 10 years. He was also married to a cousin of Pamela Cawthorne.
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Kirlin was again on the rooftop and had crawled inside the “penthouse,” a storage
shack atop the mall, to get some air conditioning filters. PKJ kept “thousands of
dollars worth of motors, refrigerants, and other parts” as well as filters in the
penthouse. Kirlin had been informed by Kelly that he was free to use the filters
stored inside the penthouse.
[¶7.] As Kirlin was crawling out of the penthouse with an arm full of filters,
he was met by Halverson. Halverson testified at his deposition that he told Kirlin,
“if you work for Carrier, you can get your own filters” and that “[Kirlin] wasn’t
going to use our filters[.]” Kirlin, stated he “decided just not to cause any waves
and [to] set the filters down.” Kirlin then “asked Mr. Halverson why he was making
it so tough on us up here.” At that point, “[Halverson] grabbed ahold [sic] of me . . .
and started slamming me up against the building[.]” According to Kirlin,
Halverson said to him, “you’re that little faggot that waved at me, aren’t you? You
think you’re fuckin’ smart, don’t you?” Kirlin denied Halverson’s allegation and
asked him who he was. Seeing the name “Kim” on Halverson’s uniform, he then
asked if that was Halverson’s name to which he replied, “yeah, my name’s Kim,
have you got a problem with that?” Halverson continued to slam Kirlin against the
penthouse and insinuate that he had gestured to him the day before. Kirlin told
Halverson that he was going to call the police. Halverson replied, “go ahead and
call the cops you little fucker.” However, as Kirlin grabbed his phone to call the
police, Halverson knocked it from his hand and shoved him. Kirlin then decided to
“get the heck out of there.” As Kirlin was back-stepping, he “struck out” at
Halverson hitting him on the chin “once, maybe twice” with a closed fist. Halverson
then started chasing Kirlin around the rooftop eventually catching him, then
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beating and kicking him into unconsciousness. When Kirlin awoke, police and fire
department EMTs were at his side.
[¶8.] Halverson was arrested and charged with aggravated assault, simple
assault and interference with emergency communications. He was acquitted on the
aggravated assault charge, but was convicted of simple assault and the interference
charge. He was sentenced to 365 days and 30 days in jail for the convictions, to be
served concurrently. While the criminal prosecutions were proceeding against
Halverson, the Kirlins commenced their civil actions against Halverson, Cawthorne
and PKJ. Cawthorne and PKJ filed a motion for summary judgment in regard to
the theories of respondeat superior and civil conspiracy, as well as the various forms
of negligence that the Kirlins set forth as a basis for liability. The motion was
heard on September 4, 2007. On October 12, 2007, the circuit court entered its
memorandum opinion granting summary judgment for Cawthorne and PKJ.
[¶9.] The Kirlins raise four issues on appeal:
1. Whether the record establishes a basis for
vicarious liability of Cawthorne and PKJ on
a theory of respondeat superior for injuries inflicted
upon Kirlins by an on-duty employee of PKJ.
2. Whether or not Halverson departed from the scope of his
employment, does a genuine issue of material fact exist
on any theory brought against Cawthorne and PKJ based
on a tort duty arising under Restatement (Second) of
Torts, § 317, or any other basis of negligence out of which
a duty can arise.
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3. Whether the record establishes a basis for the liability
of Cawthorne and PKJ on a theory of civil
conspiracy.
4. Whether the record establishes clear and convincing
evidence that there is a reasonable basis to believe
willful, wanton, or malicious conduct by Cawthorne
and PKJ, supporting punitive damages.
STANDARD OF REVIEW
[¶10.] Our standard of review of a circuit court’s grant of summary judgment
is well settled:
[W]e must determine whether the moving party demonstrated
the absence of any genuine issue of material fact and showed
entitlement to judgment on the merits as a matter of law. The
evidence must be viewed most favorably to the nonmoving party
and reasonable doubts should be resolved against the moving
party. The nonmoving party, however, must present specific
facts showing that a genuine, material issue for trial exists. Our
task on appeal is to determine only whether a genuine issue of
material fact exists and whether the law was correctly applied.
If there exists any basis which supports the ruling of the trial
court, affirmance of a summary judgment is proper.
Wojewski v. Rapid City Reg’l Hosp., Inc., 2007 SD 33, ¶12, 730 NW2d 626, 631
(quoting Read v. McKennan Hosp., 2000 SD 66, ¶8, 610 NW2d 782, 784) (additional
citations omitted). “The existence of a duty in a negligence action is a question of
law subject to de novo review by this Court.” Hohm v. City of Rapid City, 2008 SD
65, ¶3, 753 NW2d 895, 898 (citing State Auto Ins. Companies v. B.N.C., 2005 SD 89,
¶20, 702 NW2d 379, 386).
ANALYSIS AND DECISION 1
1. To avoid awkward grammatical structures and for the ease of reading, the
Kirlins’ claims will be discussed in the singular.
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[¶11.] 1. Whether the record establishes a basis for
vicarious liability of Cawthorne and PKJ
on a theory of respondeat superior for injuries
inflicted upon Kirlin by an on-duty employee
of PKJ.
[¶12.] The ancient doctrine of respondeat superior is well established as
“holding an employer or principal liable for the employee’s or agent’s wrongful acts
committed within the scope of the employment or agency.” Black’s Law Dictionary,
(8th ed 2004). In giving meaning to the phrase “within the scope of employment,”
we have stated:
“[W]ithin the scope of employment” has been called
vague but flexible, referring to “those acts which are so
closely connected with what the servant is employed to
do, and so fairly and reasonably incidental to it, that they
may be regarded as methods, even though quite
improper ones, of carrying out the objectives of the
employment.”
Deuchar v. Foland Ranch, Inc., 410 NW2d 177, 180 (SD 1987) (quoting Prosser and
Keeton on the Law of Torts § 70, at 502 (5th ed W. Keeton 1984)).
[¶13.] In Leafgreen v. American Family Mutual Insurance Co., 393 NW2d 275
(SD 1986), this Court adopted a “foreseeability” test to determine whether an
agent’s acts were within the scope of employment:
We think it fairly stated that a principal is liable for tortious
harm caused by an agent where a nexus sufficient to make the
harm foreseeable exists between the agent’s employment and
the activity which actually caused the injury; foreseeable is used
in the sense that the employee’s conduct must not be so unusual
or startling that it would be unfair to include the loss caused by
the injury among the costs of the employer’s business.
Id. at 280-81.
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[¶14.] “Foreseeability” as used in the respondeat superior context is different
from “foreseeability” as used for proximate causation analysis in tort law. Id. at
280. In respondeat superior, foreseeability includes a range of conduct which is
“fairly regarded as typical of or broadly incidental to the enterprise undertaken by
the employer.” Id. (citing Rodgers v. Kemper Construction Co., 50 CalApp3d 608,
618-19 (1975)) (emphasis added). The Leafgreen foreseeability formulation was
guided by Rodgers and the Restatement (Second) of Agency. Both continue to
provide guidance on what is foreseeable and, therefore, what is within the scope of
employment.
[¶15.] Rodgers illustrates the breadth and application of the respondeat
superior foreseeability test. Its conclusion is highly relevant to this case because of
the factual similarities. In Rodgers, two employees of a subcontractor argued with
and assaulted two employees of a general contractor at a common worksite. The
assault knocked one of the victims unconscious, led to severe injuries necessitating
multiple surgeries, and resulted in permanent disability. The second victim was
left with permanent double vision. These actions were deemed within the scope of
employment because such assaults were foreseeable to the principal/employer.
The court explained:
In the instant case, it was reasonably to be expected that
Kemper’s employees would come in contact with employees of
other contractors on the same project. The risk of such
association, as explained in Carr 2 . . . extends to expressions of
2. Carr v. Wm. C. Crowell Co., 28 Cal2d 652, 171 P2d 5 (1946) (Vicarious
liability was found against the principal when a laborer from one company
threw a hammer at a laborer from another company at a common worksite
(continued . . .)
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normal human traits which, unhappily, include occasional
emotional flareups and propensity for violence. In the case at
bench the quarrel on the job site, though between employees of
different contractors . . . was manifestly an outgrowth of the
employment relationship and a risk which may fairly be
considered as typical of, or incidental to, the employment.
Rodgers, 50 CalApp3d, 622-23 (citations omitted). Therefore, given the precedent
from which South Dakota’s foreseeability test was born, assaults between workmen
can be foreseeable.
[¶16.] “This Court has specifically held that the question of whether the act of
a servant was within the scope of employment must, in most cases, be a question of
fact for the jury.” Deuchar, 410 NW2d at 181 (citing Lovejoy v. Campbell, 16 SD
231, 237, 92 NW 24, 26 (1902)). See Restatement (Second) of Agency § 228,
comment d. 3 Given the possibility that workmen’s assaults can be foreseeable and
are “typical of, or incidental to, [their] employment,” Rodgers at 623, it was
incorrect for the circuit court to conclude in this case that “[the foreseeability]
determination may be made as a matter of law where an employee’s ‘deviation . . . is
very marked and unusual.” Fullmer v. State Farm Ins. Co., 498 NW2d 357, 363
(SD 1993) (citing Lovejoy, 16 SD at 237, 92 NW at 26). Genuine factual issues
remain as to whether this assault was foreseeable.
________________________
(. . . continued)
after they briefly quarreled. The hammer hit the victim in the head and
seriously injured him.)
3. Restatement (Second) of Agency § 228, comment d states:
The question whether or not the act done is so different from the
act authorized that it is not within the scope of the employment is
decided by the court if the answer is clearly indicated; otherwise, it
is decided by the jury.
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[¶17.] “To determine if a servant’s act is within the scope of employment,
numerous factors should be considered.” Deuchar, 410 NW2d at 180. In applying
the foreseeability test, the Leafgreen court broadly considered four factors which
suggested that the agent’s conduct was unforeseeable:
1) No benefit ran to the principal,
2) The burglary was remote in time from the principal’s involvement
with the victims,
3) The opportunity to commit the act arose out of the agent’s personal
relationship with the victims, outside of the agent’s employment,
and
4) Imposing liability on employers in these circumstances would be
“unfair.”
Leafgreen, 393 NW2d at 281.
[¶18.] The Restatement (Second) of Agency has also been used as a source of
other relevant factors to be considered by the fact finder. See Deuchar at 180, n2.
Restatement (Second) of Agency, § 228, General Statement [regarding the Scope of
Employment], comment a. instructs, “[section] 245 states the special rule which
applies when a servant intentionally 4 uses force against another person.” In whole
Section 245 reads:
A master is subject to liability for the intended tortious harm by
a servant to the person or things of another by an act done in
connection with the servant’s employment, although the act was
unauthorized, if the act was not unexpectable in view of the
duties of the servant.
4. Deuchar is factually distinguishable because it deals with a servant’s
negligent shooting of a third party, not an intentional use of force. Halverson
intentionally assaulted Kirlin.
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[¶19.] The thorough commentary to Restatement (Second) of Agency § 245 5
discusses a number of factors which should be considered when evaluating the
intentional use of force. The general factors listed in Restatement (Second) of
Agency § 229 – Kind of Conduct within Scope of Employment, repeated in Deuchar,
were considered by the trial court in its decision. These factors are inappropriate
given the more specific applicability of the “special rule” to the use of force. 6
[¶20.] Section 245, comment a. states:
Types of situations. Whether or not an employment involves or
is likely to lead to, the use of force against the person or
property of another is a matter of fact to be decided by the trier
of fact. Since opportunities and provocations arise in a great
variety of ways, no attempt is made to make an exhaustive
category of situations in which the master may be found liable.
However, certain situations recur with sufficient frequency to
call for mention. These occur when the servant: (a) acts in the
protection of or recaption of his master’s property, or (b) in
excess of zeal in competition, or (c) engages in a fight arising out
of a dispute connected with his work for his employer.
Any of these three situations may describe Halverson’s actions.
[¶21.] It is undisputed that Halverson made contact with Kirlin in order to
protect his employer’s property. While Halverson’s job description might not
expressly include such a duty, by his actions, Halverson apparently believed he had
a duty to stop Kirlin from taking filters or other items stored in the penthouse.
5. The commentary to Restatement (Second) of Agency § 245 fills almost six
pages in the published volume.
6. Because the use of force is fully discussed in Section 245, reliance on
subsection j of Restatement (Second) of Agency § 229, “whether or not the act
is seriously criminal,” by the circuit court was incorrect.
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Also, such a duty might be considered incidental to his other responsibilities.
Therefore, genuine issues of material fact remain as to whether Halverson’s use of
force was foreseeable given his employment and the duties he undertook. A finder
of fact must be given the opportunity to consider the circumstances which gave rise
to this action and the factors discussed in section 245 in order to resolve these
issues.
[¶22.] The Deuchar court considered the “employee’s intent” a relevant factor
for determining the scope of employment. Citing Professors Prosser and Keeton,
this Court stated:
An essential focus of inquiry remains: Were the servant’s acts
in furtherance of his employment? If the answer is yes, then
employer liability may exist even if his servant’s conduct was
expressly forbidden by the master. . . When a servant acts with
an intention to serve solely his own interests, this act is not
within the scope of employment, and his master may not be held
liable for it.
Deuchar, 410 NW2d at 181. Prosser and Keeton further explain:
It may be said, in general, that 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. . . But if [the servant] acts from purely personal
motives, because of a quarrel over his wife which is 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.
Prosser and Keeton on the Law of Torts §70, 505-06 (5th ed. 1984) (emphasis added).
[¶23.] This “employee’s intent” analysis for intentional torts closely comports
with the language contained in the Restatement (Second) of Agency § 245,
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Comment f. Servant actuated by personal motives. 7 See Baker v. St. Francis Hosp.,
126 P3d 602, 607 (Okla 2005) (applying § 245, cmt. f).
[¶24.] Therefore, given our precedent applying the foreseeability test and the
commentary contained in the Restatement (Second) of Agency § 245, when
considering the intentional use of force by an employee, the fact finder must first
determine whether the use of force was wholly motivated by the agent’s personal
interests or whether the act had a dual purpose, “that is, to serve the master and to
further personal interests.” Deuchar, 410 NW2d at 181. “When a servant acts with
an intention to serve solely his own interests, this act is not within the scope of
employment, and his master may not be held liable for it.” Id. (emphasis added).
[¶25.] If the act was for a dual purpose, the fact finder must then consider
the case presented and the factors relevant to the act’s foreseeability in order to
determine whether a nexus of foreseeability existed between the agent’s
employment and the activity which actually caused the injury. If such a nexus
exists, the fact finder must, finally, consider whether the conduct is so unusual or
7. Restatement (Second) of Agency § 245, comment f. Servant actuated by
personal motives, states:
The liability of a master for the use of force by a servant is not
prevented by the fact that the servant acts in part because of a
personal motive, such as revenge. The master, however, is relieved
from liability under the rule stated in this Section if the servant has
no intent to act on his master’s behalf, although the events from
which the tortious act follows arise while the servant is acting in
the employment and the servant becomes angry because of them.
The fact that the servant acts in an outrageous manner or inflicts a
punishment out of all proportion to the necessities of his master’s
business is evidence indicating that the servant has departed from
the scope of employment in performing the act. (emphasis added).
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startling that it would be unfair to include the loss caused by the injury among the
costs of the employer’s business. See generally Leafgreen, 393 NW2d at 280-81.
[¶26.] This case presents the kind of factual ambiguities that justify jury
consideration of the scope-of-employment question. Although, no reasonable job
description of an HVAC serviceman would include beating the competition’s
employees unconscious, our law of vicarious liability focuses on the foreseeability of
such conduct, not the job description. Halverson was on the clock conducting PKJ’s
business when he encountered Kirlin. Halverson would not have been in the
restricted area atop the Empire Mall but for his employment with PKJ. While
Kirlin’s own description of the incident suggests that the beating may have been
motivated by Halverson’s belief that Kirlin had gestured to him in an offensive
manner on the previous day, there was also evidence to support the conclusion that
Halverson’s assault on Kirlin was motivated in part by his interest in protecting
PKJ’s property in the penthouse. The evidence might also imply that Halverson
was motivated by the intent to further PKJ’s business interests through
discouraging the competition, albeit in a misguided and wholly unacceptable
fashion.
[¶27.] We reverse and remand to the circuit court. The circuit court
erroneously granted summary judgment in favor of PKJ on this issue. Genuine
issues of material fact remain whether Halverson was within the scope of his
employment when he assaulted Kirlin.
[¶28.] 2. Whether or not Halverson departed from the scope of his
employment, does a genuine issue of material fact exist
on any theory brought against Cawthorne and PKJ based
on a tort duty arising under Restatement (Second) of
Torts, § 317, or any other basis of negligence out of which
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a duty can arise.
There are three requirements in a negligence claim: “(1) a duty
on the part of the defendant; (2) a failure to perform that duty;
and (3) an injury to the plaintiff resulting from such a failure.”
The existence of a duty is a question of law that is reviewed de
novo. While negligence actions are not generally suitable for
summary judgment, it is appropriate when the duty question is
resolved in favor of the defendant.
State Auto Ins. Companies v. B.N.C., 2005 SD 89, ¶20, 702 NW2d 379, 386
(citations omitted).
[¶29.] In this case, the circuit court granted PKJ and Cawthorne’s motion for
summary judgment on Kirlin’s negligence claims. Summary judgment was based
on the non-existence of a duty from PKJ or Cawthorne to Kirlin. Therefore, only
the “duty” element of Kirlin’s negligence claims is before us. 8 Kirlin’s appeal
asserts that PKJ and Cawthorne had three duties which they failed to uphold.
First, the employers had a duty to control Halverson. Second, the employers owed a
special duty to protect Kirlin from Halverson. Finally, the employers had a general
duty of reasonable care in regard to carrying out their business.
[¶30.] “Generally, the law imposes no duty to prevent the misconduct of a
third person.” State Auto Ins. Companies, 2005 SD 89, ¶22, 702 NW2d at 387.
However, an employer may be held liable for negligent hiring, retention, training
and supervision. See Rehm v. Lenz, 1996 SD 51, ¶21, 547 NW2d 560, 566
(recognizing that employers can be held responsible for negligent hiring, retention
and supervision of their employees); see also Nelson v. Nelson Cattle Co., 513 NW2d
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900, 904 (SD 1994) (holding that there was evidentiary support for the jury to
conclude that the defendant did not provide an employee adequate supervision and
instruction to carry out the duties he was assigned).
Duty to Prevent the Misconduct of a Third Party
[¶31.] In a variety of situations, this Court has stated that in an allegation
that a duty exists to prevent the misconduct of a third party, the plaintiff must
show the existence of (1) a special relationship between the parties, and (2) that the
third party’s injurious act was foreseeable. See State Auto Ins. Companies, 2005 SD
89, ¶22, 702 NW2d at 387 (house sitter – homeowner); E.P. v. Riley, 1999 SD 163,
604 NW2d 7 (Department of Social Services owed a common-law duty to protect a
child from harm inflicted by a foster child with known dangerous propensities);
Walther v. KPKA Meadowlands Ltd. Partnership, 1998 SD 78, ¶41, 581 NW2d at
535 (landlord – tenant); Small v. McKennan Hosp., 437 NW2d 194, 199 (SD 1989)
(landowner – invitee). Kirlin alleges that, as a subset of the duty to prevent the
misconduct of third persons, PKJ had a “duty to control” the conduct of its employee
on top of the Empire Mall.
1. Special Relationship
[¶32.] The Restatement (Second) of Torts, Section 315 reflects this Court’s
“special relationship” prong of the duty to prevent the misconduct of a third person,
and is the starting point of our inquiry.
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(. . . continued)
8. This appeal does not reach issues regarding the failure to perform (breach) or
the resulting injury (causation and damages). Summary judgment was
granted on “duty” alone.
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[¶33.] Restatement (Second) of Torts, Section 315 states:
There is no duty so to control the conduct of a third
person as to prevent him from causing physical harm to
another unless
(a) a special relation exists between the actor and the
third person which imposes a duty upon the actor
to control the third person’s conduct, or
(b) a special relation exists between the actor and the
other which gives to the other a right to protection.
[¶34.] Restatement (Second) of Torts, Section 315, subsection (a) presents the
requirements for a “special relationship” in a “duty to control” claim. In this
subsection the “actor” is the party alleged to have the duty, here PKJ. The “third
person” is the person to be controlled, here Halverson. Comment c. to this Section
directs that “[t]he relations between the actor and a third person which require the
actor to control the third person’s conduct are stated in §§ 316-319.” See Cuppy v.
Bunch, 88 SD 22, 25, 214 NW2d 786, 788 (1974). In this case, we apply
Restatement (Second) of Torts, Section 317, Duty of Master to Control Conduct of
Servant.
[¶35.] Restatement (Second) of Torts, Section 317, states:
A master is under a duty to exercise reasonable care so
to control his servant while acting outside the scope of
his employment as to prevent him from intentionally
harming others or from so conducting himself as to create
an unreasonable risk of bodily harm to them, if
(a) the servant
(i) is upon the premises in possession of the master
or upon which the servant is privileged to enter
only as his servant, or
(ii) is using a chattel of the master, and
(b) the master
(i) knows or has reason to know that he has the
ability to control his servant, and
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(ii) knows or should know of the necessity and
opportunity for exercising such control.
[¶36.] Applying this standard, if the jury was to conclude that Halverson’s
actions are outside the scope of employment under respondeat superior analysis, 9
because Halverson intentionally harmed Kirlin, and because Halverson was
privileged to be atop the Empire Mall due only to his employment, then the sole
question regarding Halverson’s “special relationship” with PKJ is Restatement
(Second) of Torts, Section 317, subsection (b)(i), 10 whether PKJ knew or had reason
to know of its ability to control Halverson.
[¶37.] The ability to control and the power to control are not well defined or
discussed in the commentary to Section 317 or in our previous cases. The ability to
control arises from or is incident to the employer’s general duties. Comment b.
explains:
A master is required to police his own premises, and those upon
which, though in possession of another, he has a privilege of
entry for himself and his servants, to the extent of using
reasonable care to exercise his authority as the master in order
to prevent his servant from doing harm to others . . . he is not
required, however, to exercise any control over the actions of his
employees while on the public streets or in a neighboring
restaurant during the lunch interval, even though the fact that
they are his servants may give him the power to control their
actions by threatening to dismiss them from his employment if
they persist.
(emphasis added).
9. See Issue 1, supra.
10. Restatement (Second) of Torts, Section 317(b)(ii) addresses a question of
foreseeability, to be discussed below.
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[¶38.] Therefore, the ability to control can be satisfied by the mere power to
threaten dismissal. Given the employment relationship, we believe PKJ was aware
of at least this power. Furthermore, PKJ exerted its power to assign Halverson to
the roof of the mall on the morning in issue. Simply stated, PKJ knew it had the
ability to control or police Halverson’s actions atop the Empire Mall because of its
power to discipline, reassign or terminate Halverson’s employment. Consequently,
under the “duty to control” issue a “special relationship” existed between PKJ and
Halverson. 11
11. Restatement (Second) of Torts, Section 315, subsection (b) applies to Kirlin’s
“duty to protect” claim. A special relationship must exist between PKJ and
Kirlin prior to finding a legal duty sufficient to sustain this claim. Section
315, comment c. provides: “The relations between the actor and the other
which require the actor to control the conduct of third persons for the
protection of the other are stated in §§ 314A and 320.”
Restatement (Second) of Torts, Section 314A does not suggest a special
relationship between PKJ and Kirlin. PKJ is not a common carrier (§ 314A
(1)), an innkeeper (§ 314A (2)), a possessor of land who holds it open to the
public (§ 314A (3)), or one who took custody of Kirlin voluntarily or pursuant
to a statute (§ 314A (4)).
Restatement (Second) of Torts, Section 320 is also inapplicable. Kirlin was
neither deprived of his normal power of self-protection nor was he subject to
persons likely to harm him. Section 320, comment a., describes the scope of
this Section. This comment states:
The rule stated in this Section is applicable to a sheriff or peace
officer, a jailer or warden of a penal institution, officials in
charge of a state asylum or hospital for the criminally insane, or
to teachers or other persons in charge of a public school. It is
also applicable to persons conducting a private hospital or
asylum, a private school, and to lessees of convict labor.
None of these situations apply to Kirlin. Furthermore, Kirlin’s situation is
not similar enough in character to warrant consideration of extending this
rule to a different context. Therefore, no special relationship exists between
PKJ and Kirlin.
(continued . . .)
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2. Foreseeability
Wrongful activity can be foreseeable upon common experience.
We use the “totality of circumstances test” in evaluating
foreseeability. Liability is not contingent upon foreseeability of
the “extent of the harm or the manner in which it occurred.”
This means that the exact harm need not be foreseeable.
Rather, the harm need only be within the class of reasonably
foreseeable hazards that the duty exists to prevent.
State Auto Ins. Companies, 2005 SD 89, ¶25, 702 NW2d at 388-89 (citations
omitted) (emphasis added).
[¶39.] Because a “special relationship” exists between PKJ and Halverson, we
next consider the foreseeability of Halverson’s conduct under Kirlin’s “duty of
control” claim. Restatement (Second) of Torts, Section 317(b)(ii), reflects our
“foreseeability” prong and requires that PKJ had knowledge of a need to exert the
ability to control Halverson.
[¶40.] Looking at the totality of the circumstances, PKJ knew its employees
believed the penthouse on top of the Empire Mall only contained PKJ’s property.
Second, PKJ knew its employees would confront other workmen near the
penthouse, as Cawthorne had on the previous day. Third, via Cawthorne, PKJ
knew that Carrier’s agents, including Kirlin, would be working on top of the Empire
Mall for a number of days, taking items from the penthouse. Therefore, when PKJ
assigned Halverson to work at the Empire Mall, it was foreseeable that he would
________________________
(. . . continued)
Because no special relationship exists, the circuit court was correct in
granting summary judgment on Kirlin’s “duty to protect” claim. PKJ owes no
duty of protection to Kirlin. Kirlin has obliquely suggested other “special
relationships.” We have considered these suggestions and none are
applicable to this case.
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see Kirlin or another Carrier employee in or around the penthouse, confront the
worker and attempt to reclaim what Halverson perceived to be PKJ’s property. As
mentioned in Issue 1, supra., the use of force can be foreseen in the reclamation or
protection of property in respondeat superior. While these are different inquiries
that use the same word, we hold that a confrontation over PKJ’s property is
foreseeable for the purpose of establishing the legal duty of control in this situation.
As stated above, the extent of a potential hazard does not need to be foreseeable,
only that the class of such hazard reasonably exists.
Conclusion – Duty to Prevent Misconduct of a Third Person
[¶41.] We do not suggest that employers are negligent simply because an
employee assaults a third party. We conclude a “special relationship” existed
between PKJ and Halverson due to his employment and the location of the attack.
In the totality of the circumstances, knowledge of the prior day’s conflict can be
fairly imputed to PKJ. It was foreseeable to PKJ that Halverson would confront
Kirlin regarding PKJ’s property. Further, it was foreseeable that Halverson would
use force to reclaim his employer’s property. Therefore, Halverson’s assault was
foreseeable to PKJ for the purposes of establishing a legal “duty of control.”
[¶42.] With the duty question answered as a matter of law, it becomes a
question for the jury to determine if the conduct of PKJ met or failed to meet that
duty. If the jury determines that PKJ failed to meet its duty, then it must decide
whether that failure caused Kirlin damage. Therefore, we reverse and remand for a
jury’s determination on these issues.
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Duty of Reasonable Care
[¶43.] Kirlin asserts PKJ has a general duty of care when carrying out its
business. This argument to a great extent overlaps with Kirlin’s duty of control
claim. However, there is a subtle difference between these two. The duty of control
concerns PKJ’s handling of its special relationship with Halverson; the general duty
concerns PKJ’s duty to conduct itself reasonably.
[¶44.] In essence, Kirlin’s “duty of reasonable care” argument presents four
theories of negligence: 1) negligent hiring, 2) negligent retention, 3) negligent
training, and 4) negligent supervision. Differentiation of Kirlin’s claims clarifies
the assertion that a general duty of reasonable care exists in this case.
[¶45.] Broadly stated, a negligent hiring claim suggests that at the time an
employee was hired, it was negligent for an employer to engage the employee’s
services based on what the employer knew or should have known about the
employee. A negligent retention claim alleges that information which the employer
came to know, or should have become aware of, after hiring the employee made
continued employment of the employee negligent. See Yunker v. Honeywell, Inc.,
496 NW2d 419, 422-424 (Minn 1993). A negligent training claim suggests that the
manner or circumstances of the employee’s training by the employer inadequately
or defectively coached, educated, or prepared its employees for the performance of
their job duties. 12 Finally, a negligent supervision claim alleges that the employer
12. American Heritage College Dictionary (3rd ed 1997), p 1434:
train. v. 1. To coach in or accustom to a mode of behavior or performance.
2. To make proficient with specialized instruction and practice.
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inadequately or defectively managed, directed or oversaw its employees. 13 Thus,
Kirlin presents four perspectives from which to analyze the duty question.
1. Negligent Hiring and Retention
[¶46.] Kirlin’s arguments regarding negligent hiring and retention include
the same basic traits. Kirlin alleges that Halverson has a violent background of
which PKJ was aware, or should have been aware. Kirlin suggests this background
made him a danger to others. Kirlin presents Halverson’s history of violations of
the law including prior arrests for assault and a conviction for resisting arrest.
Further, Kirlin suggests that Halverson’s history as a high school wrestler, former
bull rider on the rodeo circuit and United States Marine evince his violent
tendencies.
[¶47.] We observe that courts addressing the amount of inquiry required into
an applicant’s history have concluded that when an employee’s contact with the
public is minimal there is no duty to perform a background check. See Connes v.
Molalla Trans. Sys., 831 P2d 1316, 1321-22 (Colo 1992) (concluding that the scope of
an employer’s duty in exercising reasonable care in hiring depends largely on the
anticipated degree of contact the employee will have with others in the normal
course of employment. Accordingly, where the employment calls for minimal
contact between the employee and others, there may be no reason to conduct an
investigation beyond obtaining prior employment information and personal
13. Black’s Law Dictionary (8th ed 2004):
supervision, n. The act of managing, directing, or overseeing persons or
projects.
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interview data); Garcia v. Duffy, 492 So2d 435, 441-42 (FlaApp 1986) (holding that
an employer had no duty to investigate an applicant’s background where job duties
involved incidental contact with the public).
[¶48.] Conversely, where job requirements bring an employee into frequent
contact with the public, or individuals who have special relationships with the
employer, the inquiry required expands beyond the job application and personal
interview to an investigation of the applicant/employee’s background. See Williams
v. Feather Sound, Inc., 386 So2d 1238, 1240 (FlaApp 1980) (recognizing that an
employer had no duty to investigate an applicant’s background where he was hired
for outdoor maintenance of townhouses and minimal contact with tenants.
However, the duty to perform an investigation increased when the employee was
transferred to inside work with access to pass keys); Ponticas v. K.M.S.
Investments, 331 NW2d 907, 913 (Minn 1983) (recognizing that concerning a yard
man, a production line worker or other such positions where the employee does not
pose a high risk of injury to third persons, minimal investigation in hiring is
required. However, an apartment manager’s extensive contact with tenants and
access to their apartments carries a duty to conduct an adequate background
check); C.K. Security Systems, Inc. v. Hartford Acc. & Indem. Co, 223 SE2d 453,
455 (GaApp 1976) (higher duty when hiring uniformed hotel security guards).
[¶49.] The nature of Halverson’s employment with PKJ did not expose him to
frequent contact with the public. Empire Mall operations manager, Kelly, testified
that even on a “busy day” there may be “five or six contractors” on the expansive
roof of the Empire Mall. Furthermore, there is no indication that Halverson had
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more than incidental contact with the public. Therefore, PKJ did not have a duty to
perform a background check on Halverson, as a matter of law.
[¶50.] Cawthorne did admit his awareness that Halverson had been arrested
as a result of a November 29, 1997 domestic dispute with his wife. As a result,
Halverson had been charged with aggravated and simple assault and resisting
arrest. Although Halverson was acquitted of the assault charges, he was convicted
of resisting arrest and sentenced to one year in jail. However, the record contains
no evidence of any violent episodes in the workplace. Further, there are no
incidents of violence in Halverson’s private life between the 1997 arrest and the
assault on Kirlin in 2005.
[¶51.] Halverson’s record of violations of the law is lengthy. Halverson’s
record reveals one simple assault charge stemming from a December 1995 arrest
which was subsequently dismissed; three citations for failure to maintain financial
responsibility, each of which was dismissed; one traffic-light violation; three seat
belt violations; fifteen speeding citations; one failure to renew a vehicle registration;
one grand theft charge which was dismissed; one failure to use a child restraint
device; one citation for towing a trailer without safety chains and one citation for
violating brake regulations.
[¶52.] We conclude PKJ was not under a duty to terminate Halverson’s
employment because of this history, as a matter of a duty of reasonable care. To
hold otherwise would create severe consequences for employees throughout the
state. “[P]ublic policy is a major consideration in identifying a legal duty.’” Yunker,
496 NW2d at 421. Imposing such a duty in this case, under these circumstances,
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would expose employers of those with some evidence of a violent past to potential
liability. Such a risk of liability might make employers hesitant to hire those
people, severely limiting employment opportunities. Halverson’s history of violence
only includes a single conviction which resulted from a domestic, not workplace,
confrontation 14 and an assault charge that was dismissed. Requiring employers to
fire employees or face liability under these circumstances is untenable, especially
considering Halverson’s minimal contact with others. “Such a rule would deter
employers from hiring workers with a criminal record and ‘offend our civilized
concept that society must make a reasonable effort to rehabilitate those who have
erred so they can be assimilated into the community.’” Yunker, 496 NW2d at 423
(citation omitted).
[¶53.] We reject any notion that a person presents a risk to others for violent
acts merely because he has been a wrestler, a bull rider and/or a Marine.
14. Halverson’s single conviction and single prior arrest for assault do not rise to
the level of a “person having dangerous propensities,” discussed in
Restatement (Second) of Torts § 319, Duty Of Those In Charge Of Person
Having Dangerous Propensities:
One who takes charge of a third person whom he knows or should know to
be likely to cause bodily harm to others if not controlled is under a duty to
exercise reasonable care to control the third person to prevent him from
doing such harm.
While there are, inevitably, situations where this Section might apply, this
opinion makes no comment on the “class of persons” discussed under that
Section. Suffice it to say that Halverson’s history does not indicate that his is
a case remotely similar to the disease bearer or homicidal maniac discussed
in the illustrations. Further, there is no suggestion that he has a “peculiar
tendency” to act with violence.
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2. Negligent Training
[¶54.] Kirlin has presented no facts or circumstances which implicate PKJ’s
preparation or training of Halverson for the execution of his duties. A suggestion
that an employer should train employees not to attack others is inexact. We believe
this notion is more appropriately considered negligent supervision. The circuit
court’s order of summary judgment is affirmed on the issue of negligent training.
3. Negligent Supervision
[¶55.] Given the circumstances and resolution of the PKJ/Carrier/Empire
Mall conversation the previous day, PKJ may have failed to act reasonably by not
informing Halverson that others would be removing items from the penthouse when
it assigned him work on top of the Empire Mall. The record suggests that
Cawthorne had no discussion whatsoever with Halverson regarding his argument
with Kirlin at the worksite, the manner in which that argument was resolved, the
loss of the contract with the Empire Mall’s owners, the involvement of Kelley to
resolve the conflict, or the status of the HVAC equipment in the penthouse. Such a
discussion or notification about PKJ’s changed interests atop the Empire Mall
might have prevented Halverson from confronting Kirlin in an aggressive/protective
manner. If Halverson had not confronted Kirlin about PKJ’s property, the later
assault, whatever its motivation, might not have occurred.
[¶56.] A fact finder could find that the directions and supervision provided by
PKJ fell short of what is reasonably required of this company. Whether PKJ or
Cawthorne breached this duty and whether the breach was the proximate cause of
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Kirlin’s damages are questions for a jury after a full presentation of the facts. See
Laber v. Koch, 383 NW2d 490, 493 (SD 1986).
Conclusion – Duty of Reasonable Care
[¶57.] We do not agree with the circuit court’s conclusion that the general
duty of reasonable care, as a matter of law, does not exist in this case. The circuit
court’s order of summary judgment is reversed and remanded.
[¶58.] 3. Whether the record establishes a basis for the
liability of Cawthorne and PKJ, Inc. on a theory
of civil conspiracy.
[¶59.] “A civil conspiracy is, fundamentally, an agreement to commit a tort.”
Reuben C. Setliff, II, M.D., P.C., v. Stewart, 2005 SD 40, ¶27, 694 NW2d 859, 867
(Setliff II) (emphasis added) (citations omitted). To establish a prima facie case of
civil conspiracy, the plaintiff must show:
(1) two or more persons;
(2) an object to be accomplished;
(3) a meeting of the minds on the object or course of action
to be taken;
(4) the commission of one or more unlawful overt acts; and
(5) damages as the proximate result of the conspiracy.
Id. ¶27, 866-67 (emphasis added) (citing Setliff v. Akins, 2000 SD 124, 616 NW2d
878, 889 (Setliff I); In re TMJ Implants Prods. Liab. Litigation, 113 F3d 1484, 1498
(8thCir 1997)). This is not an independent cause of action, but is “‘sustainable only
after an underlying tort claim has been established.’” Id. (citing Hanten v. School
District of Riverview Gardens, 183 F3d 799, 809 (8thCir 1999) (quoting K & S
Partnership v. Continental Bank, 952 F2d 971, 980 (8thCir 1991)).
[¶60.] Kirlin’s argument that Cawthorne and PKJ are liable on a theory of
civil conspiracy fails. Kirlin’s argument under this theory is not factually based. It
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was based on suggestions that Cawthorne and Halverson had a familial
relationship through marriage; that they hunted together; that Halverson had a 10-
year employment relationship with Cawthorne; that the two worked side by side
and that they were in constant phone communication with each other. The sum
total, Kirlin’s claim, constituted evidence that Halverson knew of Cawthorne’s
longstanding animus for Carrier and thereby must have shared his resentment. As
a result, Kirlin alleges that an inference can be drawn that Cawthorne and
Halverson must have conspired together to strong-arm Carrier and its employees
out of Sioux Falls. This however, is speculation and not factually sufficient to resist
a motion for summary judgment. See Werner, 499 NW2d at 140. Therefore, no
error is shown in the circuit court’s decision as to this issue.
Individual Claims Against Cawthorne
[¶61.] In examining the preceding issues, we find no factual or legal basis on
which Cawthorne can be held liable individually. PKJ, the corporate entity, is
Halverson’s employer. Therefore, respondeat superior liability and liability for the
duties of control and care pass to PKJ, not Cawthorne. As its agent, any negligent
actions taken by Cawthorne in his capacity as Halverson’s supervisor are the
negligent acts of PKJ. Cawthorne’s status as an owner of PKJ is immaterial to the
issues presented. Therefore, the circuit court’s grant of summary judgment to
Cawthorne on all issues is affirmed.
[¶62.] Affirmed in part, reversed in part and remanded. 15
15. Since under Issue 3 we affirm the circuit court’s grant of summary judgment
for Cawthorne and PKJ as to conspiracy, we need not address Kirlin’s fourth
(continued . . .)
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[¶63.] SABERS, KONENKAMP, and ZINTER, Justices, concur.
[¶64.] MEIERHENRY, Justice, concurs with a writing.
MEIERHENRY, Justice (concurring).
[¶65.] I concur on all issues and only write to point out that the foreseeability
test in Restatement (Second) of Agency § 228 for scope of employment analysis has
been revised in Restatement (Third) of Agency § 7.07(2) (2006) and no longer relies
on “foreseeability.” Id. Although we still adhere to this “foreseeability” analysis
today, we should perhaps consider the approach adopted by the Restatement
(Third) of Agency in the future. No one has urged this here.
[¶66.] Restatement (Third) of Agency § 7.07 no longer relies on the
foreseeability test in determining whether an employee’s acts are within the scope
of employment, partly because of its confusion with foreseeability in the negligence
context. Id. (Restatement (Second) of Agency has been superseded by Restatement
(Third) of Agency, adopted in 2005 and published in 2006). The test for determining
scope of employment for vicarious liability for an employee’s tort in the Restatement
(Third) of Agency § 7.07(2) provides as follows:
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
________________________
(. . . continued)
issue in regard to punitive damages because Kirlin failed to state the
requisite claim that Cawthorne and or PKJ acted “intentionally, or
[perpetrated an act of] willful and wanton misconduct, in disregard of
humanity.” SDCL 21-3-2.
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occurs within an independent course of conduct not intended by
the employee to serve any purpose of the employer.
Id. Comment b to this section explains the difference between § 7.07(2) of
Restatement (Third) of Agency and §§ 228 and 229 of Restatement (Second) of
Agency (often relied on by this Court). Id. cmt. b. “The scope-of-employment
doctrine in subsection (2) differs from its counterparts in Restatement Second,
Agency §§ 228 and 229 because it is phrased in more general terms.” Id. The
comment points out:
“Foreseeability” has a well-developed meaning in connection
with negligence and to use it, additionally, to define a different
boundary for respondeat superior risks confusion. Moreover,
references to “foreseeability” in the respondeat superior context
tend to conflate the foreseeable likelihood, from an employer’s
standpoint, that mishaps and slippage will occur in connection
with the performance of assigned work, with the possibility that
the work may lead to or somehow provide the occasion for
intentional misconduct that is distinct from an employee’s
actions in performing assigned work. To be sure, the latter
possibility is indeed always “foreseeable,” given human frailty,
but its occurrence is not a risk that an employer can effectively
control and its occurrence may be related causally to
employment no more than to other relationships and
circumstances in an errant employee’s life more generally.
Id. cmt. b. Additionally, comment c points out:
An employee’s assigned duties may also place the employee in
situations in which physical consequences may follow in an
uninterrupted sequence from verbal exchanges with third
parties. An escalation in the pitch of an employee’s conduct does
not by itself transform the conduct into an independent course of
conduct that represents a departure not within the scope of
employment. It is a question of fact what motivated an
employee’s conduct as verbal exchanges escalate or when
an employee’s use of physical force becomes more
pronounced.
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Id. cmt. c. (emphasis added). Although we have not previously referred to
Restatement (Third) of Agency § 7.07, its reliance on employee intentions rather
than foreseeability for scope of employment determinations is very similar to the
employee-intent discussion used in Deuchar and discussed by Chief Justice
Gilbertson. See supra ¶¶21-22; Deuchar, 410 NW2d 177; see also Patterson v. Blair,
172 SW3d 361 (Ky 2005).
[¶67.] Nevertheless, under either test, issue one on vicarious liability
involves issues of material fact that should not be decided by summary judgment.
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