Aaron Engler v. Gulf Interstate Engineering Inc , 230 Ariz. 55 ( 2012 )

SUPREME COURT OF ARIZONA
En Banc
AARON ENGLER, an unmarried man, ) Arizona Supreme Court
) No. CV-11-0273-PR
Plaintiff/Appellant, )
) Court of Appeals
) Division One
v. ) No. 1 CA-CV 10-0561
)
) Yuma County
GULF INTERSTATE ENGINEERING, ) Superior Court
INC., a corporation, ) No. CV200900353
)
Defendant/Appellee. ) O P I N I O N
_________________________________ )
Appeal from the Superior Court in Yuma County
The Honorable Mark W. Reeves, Judge
AFFIRMED
________________________________________________________________
Opinion of the Court of Appeals, Division One
227 Ariz. 486, 258 P.3d 304 (2011)
AFFIRMED
________________________________________________________________
DON B. ENGLER, P.C. Yuma
By Donald B. Engler
And
ABOUD & ABOUD, P.C. Tucson
By Michael J. Aboud
Attorneys for Aaron Engler
HOLLOWAY ODEGARD & KELLY, P.C. Phoenix
By Peter C. Kelly, II
Charles M. Callahan
Michelle N. Ogborne
Attorneys for Gulf Interstate Engineering, Inc.
________________________________________________________________
B E R C H, Chief Justice
¶1 In this case, we address whether an employer can be
held vicariously liable for an after-work accident caused by an
employee who was on an extended away-from-home assignment. We
hold that because the employee was not subject to his employer’s
control, he was not acting within the scope of his employment at
the time of the accident and the employer is therefore not
liable for his actions.
I. FACTS AND PROCEDURAL BACKGROUND
¶2 Ian Gray worked for Gulf Interstate Engineering, Inc.
(“Gulf”), a Texas-based energy consulting company. In 2007,
Gray worked on the design and construction of a natural gas
compressor for Gulf in Los Algodones, Mexico. Gray lived in
Houston and flew each week from Houston to San Diego, where he
rented a car and drove to Yuma. He stayed in a hotel in Yuma
and commuted each day to the worksite in Mexico.
¶3 Gulf reimbursed Gray’s business expenses, including the
cost of his lodging, rental cars, and meals. In addition, Gulf
paid Gray for his travel to and from the job site because his
work required him to cross an international border each day,
which often entailed significant delays, especially when
returning to Yuma. Gulf considered Gray’s work day to begin
when he left the hotel in Yuma and to conclude when he returned
- 2 -
there. During after-work hours, Gulf did not attempt to
supervise Gray or control his activities.
¶4 On December 11, 2007, after a day of work in Mexico,
Gray returned to his hotel at approximately 7:30 p.m. Shortly
thereafter, Gray and a co-worker left the hotel in Gray’s rental
car to go to a restaurant. On the way back to the hotel after
dinner, Gray made an improper left turn and hit a motorcycle
driven by Aaron Engler, who sustained serious injuries.
¶5 Engler sued Gray and Gulf for his injuries, alleging
Gray’s negligence and Gulf’s vicarious liability. Gulf moved
for summary judgment, arguing that it could not be held
vicariously liable because Gray was not acting in the course and
scope of his employment when the accident occurred. Engler
filed a cross-motion, urging the court to find that all of
Gray’s activities while in Yuma were undertaken “solely to serve
the business purposes of Gulf Interstate until he returned” to
Houston. The trial court granted Gulf’s motion. Thirteen days
later, however, the court of appeals issued its opinion in
McCloud v. Kimbro (McCloud II), 224 Ariz. 121, 125 ¶ 17, 228
P.3d 113, 117 (App. 2010), which held “that an employee on out-
of-town travel status is within the course and scope of his
employment and subjects his employer to vicarious liability
while traveling to and from a restaurant for a regular meal.”
- 3 -
Engler filed a motion for a new trial, but the trial court
distinguished McCloud II and denied the motion.
¶6 Engler appealed. The court of appeals affirmed,
holding that an employee on out-of-town travel status is not
acting within the course and scope of his employment while
traveling to or from a restaurant for a regular meal, a holding
inconsistent with the holding in McCloud II. See Engler v. Gulf
Interstate Eng’g, Inc., 227 Ariz. 486, 258 P.3d 304 (App. 2011).
Engler petitioned this Court for review.
¶7 We granted review to resolve the apparent conflict
between McCloud II and Engler. We have jurisdiction under
Article 6, Section 5(3) of the Arizona Constitution and A.R.S.
§ 12-120.24 (2003).
II. DISCUSSION
¶8 This case was decided on cross-motions for summary
judgment. The parties agree to the material facts, but disagree
as to the legal conclusion to be drawn from them. We review de
novo the superior court’s grant of summary judgment and construe
the facts and reasonable inferences in the light most favorable
to Engler, the non-prevailing party. See Andrews v. Blake, 205
Ariz. 236, 240 ¶ 12, 69 P.3d 7, 11 (2003).
¶9 “The doctrine of respondeat superior generally holds an
employer vicariously liable for the negligent work-related
actions of its employees.” Tarron v. Bowen Mach. & Fabricating,
- 4 -
Inc., 225 Ariz. 147, 150 ¶ 9, 235 P.3d 1030, 1033 (2010). But
an employer is vicariously liable for such acts only if the
employee is acting “within the scope of employment” when the
accident occurs. E.g., State v. Super. Ct. (Rousseau), 111
Ariz. 130, 132, 524 P.2d 951, 953 (1974).
¶10 To determine the course and scope of employment,
Arizona courts have long considered the extent to which the
employee was subject to the employer’s control. See, e.g.,
Consol. Motors, Inc. v. Ketcham, 49 Ariz. 295, 305, 66 P.2d 246,
250 (1937); Rousseau, 111 Ariz. at 132, 524 P.2d at 953 (noting
that the “basic test” in tort actions arising out of vehicular
accidents is whether the employee is “subject to the employer’s
control or right to control” at the time of the accident);
Tarron, 225 Ariz. at 150 ¶ 12, 235 P.3d at 1033.
¶11 This approach is endorsed by the Restatement of Agency.
E.g., Ketcham, 49 Ariz. at 306, 66 P.2d at 250 (citing
Restatement (First) of Agency § 220 (1933)); Santiago v. Phx.
Newspapers, Inc., 164 Ariz. 505, 508-09, 794 P.2d 138, 141-42
(1990) (citing Restatement (Second) of Agency (“Restatement
(Second)”) § 220 (1958)). Several sections of the Restatement
(Second) identify relevant factors for determining whether the
employer exercised actual control or retained the right to
control the employee’s conduct when the negligent act occurred.
See Restatement (Second) §§ 219(2), 220(2), 228(1), 229(2).
- 5 -
These factors include the previous relations between the
employer and the employee and whether the act (a) was the kind
the employee was hired to perform, (b) was commonly done by the
employee, (c) occurred within the employee’s working hours, and
(d) furthered the employer’s purposes or fell outside the
employer’s “enterprise.” See Higgins v. Assmann Elec., Inc.,
217 Ariz. 289, 297 ¶¶ 29-32, 173 P.3d 453, 461 (App. 2007)
(citing Restatement (Second) § 229); Anderson v. Gobea, 18 Ariz.
App. 277, 280, 501 P.2d 453, 456 (1972) (citing Restatement
(Second) § 228).
¶12 Applying these factors in previous cases to evaluate an
employee’s away-from-work conduct, we have not found the
requisite employer control when the employee maintained the
right to choose where, when, and how to travel, and by what
route. See Rousseau, 111 Ariz. at 132-33, 524 P.2d at 953-54.
Nor has reimbursement of travel expenses or “payment of a travel
allowance, without more” subjected the employer to liability.
Id. at 133, 524 P.2d at 954 (citing Lundberg v. State, 255
N.E.2d 177, 179 (N.Y. 1969)); see also Robarge v. Bechtel Power
Corp., 131 Ariz. 280, 284, 640 P.2d 211, 214 (App. 1982) (citing
Lundberg).
¶13 Although this case presents a fact pattern not
confronted in our previous cases — negligent driving by an
employee on out-of-town travel status — the same analysis
- 6 -
applies: An employee’s tortious conduct falls outside the scope
of employment when the employee engages in an independent course
of action that does not further the employer’s purposes and is
not within the control or right of control of the employer.
Robarge, 131 Ariz. at 283-84, 640 P.2d at 213-14. This test
also comports with the Restatement (Third) of Agency
(“Restatement (Third)”) § 7.07, which consolidates the
“treatment of topics covered in several separate sections of
[the] Restatement Second, Agency, including §§ 219, 220, 228,
229, 230, 231, 232, 233, 234, 235, 236, 237, and 267.”1
Restatement (Third) § 7.07 (Reporter’s Note (a) (2006)). We
agree with the court of appeals that the Restatement (Third)
§ 7.07 sets forth the appropriate test for evaluating whether an
employee is acting within the scope of employment, and we adopt
it here. See Tarron, 225 Ariz. at 152-53 ¶¶ 24-28, 235 P.3d at
1
Restatement (Third) of Agency § 7.07 provides as follows:
(1) An employer is subject to vicarious liability for
a tort committed by its employee acting within the scope of
employment.
(2) 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 occurs within an independent course of conduct not
intended by the employee to serve any purpose of the
employer.
(3) For purposes of this section,
(a) an employee is an agent whose principal
controls or has the right to control the manner and
means of the agent’s performance of work, and
(b) the fact that work is performed gratuitously
does not relieve a principal of liability.
- 7 -
1035-36 (following control test from Restatement (Third)
§ 7.03).
¶14 Applying the Restatement (Third) test, Gulf did not
exercise any control over Gray at the time of the accident.
Gray was not serving his employer’s interests in traveling to
and from the restaurant during his off hours, and Gulf did not
control where, when, or even if Gray chose to eat dinner. Once
Gray returned to his hotel at the end of the work day, he was
free to do as he wished. That he ate dinner with a work
colleague after work hours did not transform the social occasion
into a business activity. See Pham v. OSP Consultants, Inc.,
992 P.2d 657, 659 (Colo. App. 1999) (finding employee’s
patronage of bar with co-worker during after-work hours
unrelated to employer’s business) (citing Hynes v. Donaldson,
395 P.2d 221, 222-23 (Colo. 1964)). Because the accident
occurred while Gray engaged in an independent course of action
not intended to serve his employer’s work purposes, Gulf is not
vicariously liable.
¶15 Rather than focusing on the employer’s right to
control, Engler urges us to view scope of employment broadly,
applying workers’ compensation principles. Workers’
compensation is a no-fault system for compensating injured
employees that focuses on whether the employee was injured while
working or performing a work-related activity. Robarge, 131
- 8 -
Ariz. at 282, 640 P.2d at 213. Workers’ compensation laws are
liberally construed and applied to benefit the injured employee.
See Grammatico v. Indus. Comm’n, 211 Ariz. 67, 72 ¶ 23, 117 P.3d
786, 791 (2005). In McCloud II, the court of appeals recognized
that workers’ compensation principles may provide guidance in
vicarious liability cases. 224 Ariz. at 123-24 ¶ 10, 228 P.3d
at 115-16 (citing Anderson, 18 Ariz. App. at 280, 501 P.2d at
456). But we disagree that those standards should apply here.
Workers’ compensation and tort law differ in purpose and scope.
Robarge, 131 Ariz. at 282, 640 P.2d at 213. Workers’
compensation covers injured employees, whereas “respondeat
superior subjects employers to liability for injuries suffered
by an indefinite number of third persons.” Id. (citing Luth v.
Rogers & Babler Constr. Co., 507 P.2d 761, 764 (Alaska 1973)
(superseded by statute on other grounds)). The concept of
“scope of employment,” when used in the tort context, is tied to
the employer’s right to control the employee’s activity at the
time of the tortious conduct. Robarge, 131 Ariz. at 282, 640
P.2d at 213; see also Throop v. F. E. Young & Co., 94 Ariz. 146,
153, 382 P.2d 560, 564 (1963) (noting that workers’ compensation
cases are not necessarily authority for determining common-law
liability under the doctrine of respondeat superior). We
therefore decline Engler’s invitation to apply workers’
compensation principles to this tort inquiry.
- 9 -
¶16 Engler next urges us to hold that all of Gray’s
activities while in Yuma furthered Gulf’s business purposes. He
insists that they were “not merely a large part of Mr. Gray’s
employment — [they were] his employment.” Engler, 227 Ariz. at
489 ¶ 9, 258 P.3d at 307. We disagree. Whether the employee
was subject to the employer’s control must be assessed at the
time of the employee’s tortious act. Carnes v. Phx. Newspapers,
Inc., 227 Ariz. 32, 35 ¶ 10, 251 P.3d 411, 414 (App. 2011). At
the time of the accident, Gulf exercised no control over Gray.
¶17 Engler similarly maintains that Gulf exercised control
over Gray because Gray had to eat during his lengthy away-from-
home work assignment. We agree that Gray had to eat, but
disagree that this converts Gray’s personal time into work time.
Not every activity of an employee on a work assignment is under
the employer’s control, even if the employer understands that
such activity is necessary or might occur. See, e.g.,
Scottsdale Jaycees v. Super. Ct. (Weaver), 17 Ariz. App. 571,
575, 499 P.2d 185, 189 (1972).
¶18 Engler relies on State Department of Administration v.
Schallock, 189 Ariz. 250, 941 P.2d 1275 (1997), to support the
argument that any conduct incidental to authorized conduct
should fall within the scope of employment and render the
employer subject to liability. Although Schallock cites the
Restatement (Second) factors to determine whether conduct not
- 10 -
expressly authorized falls within the course and scope of
employment, it provides little guidance. Schallock involved
managerial sexual harassment. Id. The employee in Schallock
was able to carry out his harassment in part because he was a
supervisor, and the harassment occurred as part of his
“supervision” of the plaintiff, id. at 261-62, 941 P.2d at 1286-
87, a situation far different from the one before us. The Court
itself recognized that “special factual and legal
considerations” distinguish such cases “from the great majority
of cases involving torts committed by a servant against” a third
party. Id. at 257, 941 P.2d at 1282.
¶19 Finally, Engler encourages us to follow the analysis in
McCloud II. We decline to do so. As a preliminary matter, we
note that McCloud II involved an administrative regulation
providing that a DPS officer comes “within the course and scope
of employment when driving a state-owned vehicle if driving ‘to
and from meals while on out-of-town travel.’” 224 Ariz. at 125
¶ 15, 228 P.3d at 117 (quoting Ariz. Admin. Code R2-10-
107(A)(2)(d)). That regulation does not apply here. But to the
extent that McCloud II suggests that employees generally are
acting within the course and scope of their employment when
“driving to a restaurant” while off duty during an extended out-
of-town assignment “because eating is incidental to a multiple-
day assignment,” id. ¶ 17, we disagree.
- 11 -
¶20 In sum, analysis of Gulf’s control over Gray at the
time of the accident reveals that Gray was on his own time, was
not subject to his employer’s control, and was not serving his
employer’s purposes in traveling from the restaurant during his
off hours.
III. CONCLUSION
¶21 For the reasons set forth above, we affirm the judgment
of the superior court and the opinion of the court of appeals.
__________________________________
Rebecca White Berch, Chief Justice
CONCURRING:
_____________________________________
Scott Bales, Vice Chief Justice
_____________________________________
A. John Pelander, Justice
_____________________________________
Robert M. Brutinel, Justice
_____________________________________
*
* Before his resignation on June 27, 2012, as a result of his
appointment to the United States Court of Appeals for the Ninth
Circuit, Justice Andrew D. Hurwitz participated in this case,
including oral argument, and concurred in this opinion’s
reasoning and result.
- 12 -