Rogers v. J B Hunt Transport, Inc

Michigan Supreme Court
Lansing, Michigan 48909
____________________________________________________________________________________________
C hief Justice Justices
Maura D. Cor rigan Michael F. Cavanagh

Opinion
Elizabeth A. Weaver
Marilyn Kelly
Clifford W. Taylor
Robert P. Young, Jr.
Stephen J. Markman

____________________________________________________________________________________________________________________________

FILED JULY 23, 2002

ALFONSO E. ROGERS, Personal Representative

of the Estate of Daimon Ja’Von Rogers,

Deceased,

Plaintiff-Appellee,

v No. 118766

J. B. HUNT TRANSPORT, INC.,

Defendant-Appellant

and

WESLEY HOWARD CRENSHAW,

Defendant.

____________________________________

BEFORE THE ENTIRE COURT

WEAVER, J.

In this wrongful death action, we address whether a

default entered against an employee that conclusively

determined the employee’s negligence for the purpose of the

employee’s personal liability is also a proper foundation for

an order holding his employer vicariously liable. The Court

of Appeals held that it was, thereby extending the effect of

the default to the employer and precluding the employer from

contesting its vicarious liability. We reverse the decision

of the Court of Appeals and remand to the circuit court.

This action arises from an automobile accident that

occurred in the early afternoon on June 17, 1996. The

decedent, Daimon Rogers, was killed when his vehicle left the

roadway and struck a tractor-trailer rig parked on the north

shoulder of the westbound I-96 expressway in Eaton County,

Michigan. It is undisputed that defendant-appellant J. B.

Hunt owned the tractor-trailer and that defendant Wesley

Crenshaw had been operating the tractor-trailer in the course

of his employment with J. B. Hunt.

J. B. Hunt terminated Crenshaw’s employment in July 1996.

Subsequently, on July 23, 1996, the personal representative of

Daimon Rogers’ estate filed a complaint against Crenshaw and

J. B. Hunt. It alleged Crenshaw was negligent and that his

negligence was a proximate cause of Daimon Rogers’ crash and

death. It also alleged J. B. Hunt’s vicarious liability.

J. B. Hunt filed an answer on its own behalf denying

Crenshaw’s negligence and causation. However, Crenshaw failed

to personally file an answer or appear in response to two

summonses. On March 20, 1997, the Eaton Circuit Court issued

a third summons and an order permitting alternative service of

process by publication and by service on codefendant, J. B.

Hunt. Thereafter, J. B. Hunt’s attorney purported to file an

answer on behalf of Crenshaw.

Crenshaw repeatedly failed to appear for depositions over

a fourteen-month period. On August 6, 1998, plaintiff

obtained an order of default pursuant to MCR 2.313(B) and (D)

against Crenshaw. During the hearing on plaintiff’s motion

for the default of Crenshaw, J. B. Hunt’s attorney moved to

withdraw as counsel of record for Crenshaw. The trial court

granted both motions. J. B. Hunt did not object to the entry

of the order of default.

On December 15, 1998, plaintiff moved for partial summary

disposition regarding the liability of J. B. Hunt. Plaintiff

argued that the default that was entered against defendant

Crenshaw settled the question of J. B. Hunt’s liability and,

therefore, J. B. Hunt could not contest the issues of

negligence and causation at trial. Plaintiff also argued that

J. B. Hunt was precluded from presenting the affirmative

defense of comparative negligence. The circuit court granted

plaintiff’s motion in part, concluding that J. B. Hunt was

vicariously liable for the negligence of Crenshaw and could

not contest at trial the issues of negligence and proximate

cause. However, the trial court also denied the motion in

part, concluding that J. B. Hunt could raise the defense of

the decedent’s comparative negligence and whether his

comparative negligence was a proximate cause of the accident.

The Court of Appeals affirmed, citing “compelling policy

consideration[s]” involving vicarious liability. 244 Mich App

600, 610; 624 NW2d 532 (2001). Specifically, the panel

stated, “[e]mployers are held vicariously liable not because

of their ability to control their employees’ conduct, but

because they stand to profit from their employees’ conduct.”

Id. at 610-611. With this, the panel discarded the linchpin

justifying vicarious liability between an employer and an

employee—that the employee committed an act producing a claim

in the scope of employment. The panel’s reasoning suggests

that if the employer financially profits from an employee’s

activities, the employer is vicariously liable not only for

everything the employee does within the scope of employment,

but also to all acts tangentially related to that employment

or occurring outside the scope of employment, even if they

occurred after the employee leaves the employment. We granted

leave to appeal because the panel’s suggestion that an

employer may be vicariously liable not only for employees’

torts committed within the scope of employment, but also for

wrongful conduct outside the scope of employment is worthy of

review.

The law regarding respondeat superior and, in particular,

how the entry of a default against an employee affects the

liability of an employer where the employer’s sole source of

liability is vicarious are questions of law. We review

questions of law de novo. Kelly v Builders Square, Inc, 465

Mich 29, 34; 632 NW2d 912 (2001). The grant of a motion for

summary disposition is also reviewed de novo. MacDonald v

PKT, Inc, 464 Mich 322, 332; 628 NW2d 33 (2001).

III

In addressing this issue as posed by the Court of

Appeals, it is important to clarify why the courts have

imposed liability on those who were not the actors, but merely

the masters of the actors. The reason is that “a master is

responsible for the wrongful acts of his servant committed

while performing some duty within the scope of his

employment.” Murphy v Kuhartz, 244 Mich 54, 56; 221 NW 143

(1982). An employer is not vicariously liable for acts

committed by its employees outside the scope of employment,

because the employee is not acting for the employer or under

the employer’s control. For example, it is well established

that an employee’s negligence committed while on a frolic or

detour, Drobnicki v Packard Motor Car Co, 212 Mich 133; 180 NW

459 (1920), or after hours, Eberle Brewing Co v Briscoe Motor

Co, 194 Mich 140; 160 NW 440 (1916), is not imputed to the

employer. In addition, even where an employee is working,

vicarious liability is not without its limits. For example,

we have held that “there is no liability on the part of an

employer for torts intentionally or recklessly committed by an

employee beyond the scope of his master’s business.” Bradley

v Stevens, 329 Mich 556, 562; 46 NW2d 382 (1951).

Likewise, respondeat superior or vicarious liability

principles do not support imposing liability on J. B. Hunt in

the present case merely on the basis of Crenshaw’s default.

When Crenshaw failed to participate in this litigation, he was

not acting within the scope of employment. Rather, Crenshaw

was acting on behalf of himself only in regard to the

litigation. In fact, his procedural failures were committed

when he was a former employee of J. B. Hunt. Because his

nonparticipation was not in the course of his employment with

J. B. Hunt, extending liability to J. B. Hunt for Crenshaw’s

nonparticipation is beyond the scope of vicarious liability.

In this regard, we emphasize that the basis of vicarious

liability is not merely that an employer typically has a

greater ability to pay than an employee. As a leading

treatise on American tort law explains, additional rationales

for vicarious liability for acts of agents within the scope of

employment include providing an incentive for employers to

attempt to reduce tortious conduct by their employees and the

fair distribution of risk associated with activity

characteristic of a business or other entity. See Dobbs,

Torts, § 334, pp 908-910. Risks typically associated with

operating trucks may fairly be said to be characteristic of J.

B. Hunt’s business activities. However, an employee’s refusal

to participate in litigation is not a characteristic risk of

operating a trucking business. Accordingly, such

nonparticipation is not something that an employer can

reasonably be expected to deter or fairly be expected to

absorb as a cost of doing business.

Here Crenshaw was not, in his capacity as a litigant,

acting for J. B. Hunt. To bind an employer to the actions of

a party who was not acting within the scope of employment at

the time those actions occur, violates the central tenet of

vicarious liability that a master’s liability is derivative of

the servant’s. In sum, the rationales that support the

imposition of vicarious liability on a master also support

limiting such liability to conduct that occurs within the

scope of employment. Id., p 910. By misapplying the policies

underpinning vicarious liability, the Court of Appeals panel

in this case took the doctrine too far.

Moreover, the Court of Appeals approach is contrary to

longstanding legal principles related to the effect of a

default. As a sanction for Crenshaw’s failure to cooperate

with the discovery process, the trial court entered an order

of default against him. It is well settled under the law that

this default operates as an admission of Crenshaw’s

negligence. However, a traditional rule of default provides

that the default of one party is not an admission of liability

on the part of a nondefaulting coparty. Allstate Ins Co v

Hayes, 442 Mich 56, 73; 499 NW2d 743 (1993). Thus, the

default entered against Crenshaw does not establish any

liability on the part of J. B. Hunt.

While the doctrine of vicarious liability allocates the

risk of an employee’s negligent acts occurring during the

course of employment on the employer, we cannot agree that

this rule justifies the extension of the effect of a default

to a codefendant. Default is a punitive measure, appropriate

in defined circumstances, the threat of which encourages the

cooperation of parties to a suit. Our court rules governing

the entry of defaults and default judgments are narrowly

designed to sanction an uncooperative party. Nowhere in the

rules is it contemplated that a cooperating party can be

sanctioned for a coparty’s procedural shortcomings.1

1
MCR 2.313(D)(1)(a) provides that “just” sanctions are

appropriate where a party fails to appear for depositions

after being served proper notice. MCR 2.313(B)(2)(c) provides

for “rendering a judgment by default against the disobedient

party.”

Obviously, J. B. Hunt could not force its former employee,

Crenshaw, to participate in discovery. Indeed, it has never

been contended that J. B. Hunt controlled Crenshaw’s

litigation activity or participated in misconduct that

produced Crenshaw’s default. Therefore, the goal of forcing

defendants to properly cooperate with litigation would not be

reasonably furthered by extending the consequences of the

default to J. B. Hunt. As recognized by Stillwell v City of

Wheeling, 210 W Va 599, 606; 558 SE2d 598 (2001), penalizing

a party that has no control over a co-party’s default would

“have no deterrent effect.”

Our decision is informed by our court system’s preference

for disposition of issues on their merits. North v Dep’t of

Mental Health, 427 Mich 659, 662; 397 NW2d 793 (1986)

(addressing this preference in the context of a dismissal with

prejudice). For this reason, defaults and default judgments

are not favored in the law. Wood v Detroit Automobile Inter-

Ins Exch, 413 Mich 573, 586; 321 NW2d 653 (1982). In this

regard, it is important to emphasize that the entry of a

default against Crenshaw does not establish that he was

actually negligent in connection with the accident underlying

this case. Rather, the entry of the default bars him from

contesting the issue of his negligence because of his failure

to properly participate in the litigation. Unlike Crenshaw,

J. B. Hunt has participated in the litigation. Thus, there is

nothing inconsistent in allowing J. B. Hunt to contest the

alleged negligence of Crenshaw even though Crenshaw himself

would not be allowed to do so in light of the default entered

against him.

Our decision does not undercut the validity of default as

a sanction for discovery abuses. Contrary to the Court of

Appeals concerns, allowing J. B. Hunt to contest Crenshaw’s

negligence and causation does not render the punitive purposes

of the default meaningless. The default remains in force

against Crenshaw and forecloses his ability to present proofs

denying his own negligence.2 Potentially, plaintiff is

prejudiced to the extent that he cannot depose Crenshaw.

However, J. B. Hunt’s defense is similarly potentially

prejudiced by the absence of Crenshaw’s testimony. The

possible prejudicial consequences of a party’s failure to

appear and resultant default do not justify the extension of

the punitive effect the sanction to an appearing party or

denying that party the opportunity to present its defense.

We conclude that, where a party’s sole source of

liability is vicarious, a default entered against a coparty

2
As Crenshaw’s alleged negligence has yet to be

litigated, we express no opinion on the merits of the

negligence or proximate cause issues.

does not preclude the former from contesting its vicarious

liability. The decision of the Court of Appeals is reversed

and this matter remanded to the circuit court for further

proceedings consistent with this opinion.

CORRIGAN , C.J., and TAYLOR , YOUNG, and MARKMAN , JJ.,

concurred with WEAVER , J.

CAVANAGH, J., concurred in the result only.

S T A T E O F M I C H I G A N

SUPREME COURT

ALFONSO E. ROGERS, personal

representative of the estate of

Daimon Ja'Von Rogers, deceased,

Plaintiff-Appellee,

v No. 118766

J. B. HUNT TRANSPORT, INC.,

Defendant-Appellant,

and

WESLEY HOWARD CRENSHAW.

___________________________________

KELLY, J. (dissenting).

I disagree with the majority's narrow view of vicarious

liability.

The Court of Appeals held, for legal and public policy

reasons, that it is proper to hold the employer, J. B. Hunt

Transport, Inc., liable for a tort that was established by

default. In doing so, it followed the law:

Where several defendants are treated as one,

as in cases involving employers and employees, but

one defaults, the defaulter still has the benefit

of any contributory negligence established against

the plaintiff by the remaining defendant. Thus,

where vicarious liability is found, the court

should tell the jury that the defaulting employee

has been found negligent, and his negligence should

be compared to that of the plaintiff in determining

the defendants' liability. [57B Am Jur 2d,

Negligence, § 1276, p 174.]

I agree with the Court of Appeals, which used the default of

the driver, Wesley Crenshaw, to preclude Hunt from denying

liability for Crenshaw's negligence.

The majority relies on the notion that Hunt's "control"

of Crenshaw at the time of the default is the key to whether

Hunt is liable. It assumes that the only time when liability

for Crenshaw's acts could attach was when Crenshaw was an

employee of Hunt.

Certainly, control is one of the considerations upon

which respondeat superior liability reposes. However, it is

not the only consideration. When the majority uses control as

its only consideration, it confuses liability arising from

respondeat superior with vicarious liability arising from

another doctrine, agency.

The difference between the two is explained by 27 Am Jur

2d, Employment Relationship, § 460, pp 897-898:

Vicarious liability based on agency is

distinct from liability based on respondeat

superior in that the employer is not liable for the

acts of the employee under the former theory unless

the employee acted on behalf of or under the

authority of the employer and unless the employer

clearly approved of the wrongful conduct.

The majority is using an agency theory to support vicarious

liability. Because Hunt had no control over Crenshaw when the

latter defaulted, the majority will not allow vicarious

liability to attach.

Vicarious liability should be found in this case not on

the basis of agency, but on the basis of the doctrine of

respondeat superior. Holding the employer liable for the

underlying tort, even though its employee defaulted, would

satisfy vital policy interests, such as justice, convenience,

deterrence, social justice, and the ability to give the victim

an effective remedy. These approaches have been explained in

Am Jur 2d:

The modern basis for vicarious liability is

that, as a matter of public policy, an enterprise

or an activity should bear the risk of a tort- -
committed or resulting from omission--of those who,

-
in fact, carry on the enterprise, activity or

operation. It is a part of the cost of doing

business or carrying on various activities; and, in

modern society, in Western countries at least, the

cost is spread throughout industries or even the

public at large by use of liability insurance and

similar self-insurer devices--rather than being

-
borne by some hapless injury victim. Thus, the

doctrine has been developed and extended out of the

necessity of changing social and economic

conditions. [57B Am Jur 2d, Negligence, § 1753, pp

447-448.]

The authors of Torts, Prosser and Keeton, also assert

that vicarious liability is not a mere question of control,

and that other bases exist for it:

The losses caused by the torts of employees,

which as a practical matter are sure to occur in

the conduct of that employer's enterprise, are

placed upon that enterprise itself, as a required

cost of doing business. They are placed upon the

employer because, having engaged in an enterprise,

which will on the basis of all past experience

involve harm to others through the torts of the

employees, and sought to profit by it, it is just

that he, rather than the innocent injured plaintiff

should bear them; and because he is better able to

absorb them, and to distribute them, through

prices, rates or liability insurance, to the

public, and so to shift them to society, to the

community at large. [Prosser & Keeton, Torts (5th

ed), § 69, pp 500-501.]

Therefore, the majority errs by giving undue weight to

control. Had Crenshaw been held liable after a trial, Hunt

would have been liable for Crenshaw's negligence, even though

it has no control over what Crenshaw did, said, or admitted at

trial. This is because, on a respondeat superior theory, the

employer is normally liable for the employee's underlying

tort.

There is another good reason to hold the employer liable

here. Default is considered to be a punitive measure, but it

is accepted in the law because it is needed to preserve a fair

tribunal, free of egregious discovery abuses. Despite this

need, the majority allows the employer a potential benefit

from the driver's default, the driver's absence from trial as

a major witness.

Moreover, the policy reasons cited by the majority

support the use of the default against Hunt. As it points

out, the imposition of vicarious liability serves as an

incentive for employers to reduce tortious conduct and

promotes a fair distribution of risk. Trucking companies hire

drivers to traverse multiple states where they might become

involved in accidents. They must be held to know that a

lawsuit and the potential default of an out-of-state driver

are risks to be expected in their business.1 In balance, it

is better that Hunt not be allowed a potential benefit from

the absence of Crenshaw at trial.

Finally, it should be noted that the imposition of

vicarious liability on Hunt would not render it defenseless at

trial. A default would establish negligence on the part of

Crenshaw, but it would not determine the extent of Hunt's

liability. Under the Court of Appeals decision, Hunt would

still be able to contest up to ninety-nine percent of its

liability at trial.

Because I believe that the majority's analysis is too

restrictive a view of vicarious liability based on respondeat

superior, I dissent.

1
In fact, it has happened before that a trucking

company's driver, resident in another state, became involved

in an accident and defaulted upon being sued. See, e.g., J B

Hunt Transport, Inc v Bentley, 207 Ga App 250; 427 SE2d 499

(1993).