We granted certiorari to determine whether the intermediate court erred in reversing a judgment which held that House of Decor, Inc. was vicariously liable for plaintiff's injuries caused by Chuck Williams, an alleged employee of House of Decor. The critical issue is whether Williams was an employee of the House of Decor in the course and scope of that employment at the time of the accident.
William Cusack and Steven Tomoletz, as individuals, leased certain immovable property in the Vieux Carré section of New Orleans. The lower floor of the main building on the property was used as a gift shop operated by the House of Decor, Inc., a corporation in which Cusack and Tomoletz were the sole shareholders. The two men resided on the upper floor of the main building.
The leased property also included slave quarters in the rear. Cusack and Tomoletz sublet the upper apartment in the slave quarters to Williams on a two-year lease for a monthly rental of $125, executing the sublease in their individual capacities and not as officers of the corporation. They used the lower floor of the slave quarters to store inventory for the House of Decor.
Shortly before the October 31, 1976 accident, Cusack and Tomoletz purchased immovable property in another location with the intention of moving their residence. They agreed with Chuck Williams that he could rent the rear apartment in their new quarters. However, The House of Decor was to close permanently when the lease ended in December, 1976.
The day before the accident, Cusack asked plaintiff, an employee of a hotel across the street from the House of Decor, to help move a refrigerator from Williams' upper apartment to the new residence. The accident occurred on a Sunday, before the hour that the gift shop opened. While Williams and plaintiff were attempting to move the refrigerator down the stairs of the slave quarters to Williams' truck, Williams lost his grip, and the refrigerator fell onto plaintiff's ankle.
Plaintiff filed suit against the House of Decor and Gulf Insurance Company as the corporation's liability carrier, alleging that
After trial on the merits, the jury answered written interrogatories and found that Williams was an employee of House of Decor at the time of the accident and that his negligence caused plaintiff's injuries.
This court, citing Gonzales v. Xerox Corp., 320 So.2d 163 (La.1975), summarily remanded and ordered the intermediate court to decide the case on the complete record. 441 So.2d 752 (1983). The Fourth Circuit once again reversed, concluding that Williams was not in the course and scope of his employment for the House of Decor at the time of the accident. 447 So.2d 1102 (1984). We granted certiorari, being primarily concerned about an employer's liability for the off-duty torts of an employee who was performing (perhaps under subtle economic coercion) tasks at the request of and for the personal benefit of a principal officer and shareholder of a corporate employer. 456 So.2d 159 (1984).
La.C.C. Art. 2320 provides:
In order for plaintiff to recover under this principle of law, he was required to prove that Williams was an employee of the House of Decor, in the course and scope of his employment for that entity, when the accident occurred.
Whether a party is liable for the act of a tortfeasor on the basis that the tortfeasor was the party's employee in the course and scope of employment depends upon the proof and assessment of several factors, including payment of wages by the employer, the employer's power of control, the employee's duty to perform the particular act, the time, place and purpose of the act in relation to service of the employer, the relationship between the employee's act and the employer's business, the benefits received by the employer from the act, the motivation of the employee for performing the act, and the reasonable expectation of the employer that the employee would perform the act.
The evidence in the present case on the issue of the corporation's vicarious liability consisted of the testimony of plaintiff and of Cusack. Williams' whereabouts were unknown, and he did not testify. Tomoletz's deposition is in the record, but was
Plaintiff testified that he had known Cusak and Tomoletz for about ten years, because they also operated a gift shop in the hotel where he worked. He occasionally assisted them in the gift shops by performing odd chores such as moving things. He stated that sometimes they tipped him and sometimes they didn't, explaining that they were friends who did favors for each other.
As to Williams, plaintiff testified that Williams sold T-shirts in the House of Decor's alley which led to the slave quarters. He stated he had seen Williams working in both shops behind the cash register, as well as working as a handyman and a watchman at the House of Decor.
Cusack testified that since Williams rented the rear apartment, they allowed him to sell T-shirts in the alleyway. He also admitted that Williams performed odd jobs for the House of Decor around the premises, such as keeping the sidewalk clean in front of the building, and that he was occasionally asked by the female clerks at the gift shop to carry packages for a customer or to "keep an eye out" for trouble because of the location in a rough neighborhood. However, Cusack denied that the House of Decor ever paid Williams any compensation for these services and that he and Tomoletz ever forgave Williams rental payments in return for his services (although he admitted that Williams was always delinquent in paying rent). Cusack also denied that Williams ever helped inside the gift store or operated the cash register, suggesting that Williams may have been seen at the coffee stand near the cash register.
In summary, Williams did not receive any wages from the House of Decor. The corporation had no power of control or power of discharge over his work activities.
Determination of the course and scope of employment is largely based on policy. The risks which are generated by an employee's activities while serving his employer's interests are properly allocated to the employer as a cost of engaging in the enterprise. However, when the party (the alleged employer) upon whom vicarious liability is sought to be imposed had only a marginal relationship with the act which generated the risk and did not benefit by it, the purpose of the policy falls, and the responsibility for preventing the risk is solely upon the tortfeasor who created the risk while performing the act.
In the present case, the jury found that Williams was an employee of the House of Decor. The evidence arguably supports this limited determination that he was an occasional employee.
We therefore conclude that Williams' act of moving the refrigerator, during the performance of which plaintiff was injured, was not performed by an employee of House of Decor in the course and scope of employment.
Accordingly, the judgment of the court of appeal is affirmed.
CALOGERO and DENNIS, JJ., dissent and assign reasons.
CALOGERO, Justice, dissenting.
The trial jury found that Williams was an employee of the House of Decor, Inc. The Court of Appeal, and this Court now, have reversed that finding. With this finding I disagree. Williams was a handyman who frequently worked for Cusack and Tomoletz and/or their corporation, House of Decor, Inc. On the Sunday in question he had for the corporation been engaged in removing from a portion of the rear premises which he also occupied, inventory items belonging to the corporation.
Nonetheless, were I to accept the majority's premise that he was not an employee in the course and scope of employment with House of Decor, Inc. I would still very likely find liability in Gulf Insurance Company.
Cusack and Tomoletz, individually as co-lessees, leased the entire premises, 526 Bourbon Street, from the owners thereof. In turn they occupied a major part of the premises with a corporation in which they were the principal stockholders, House of Decor, Inc. A portion of the premises, the rear or slave quarters, they leased for $100.00 a month to Williams, a man who coincidentally was used by their corporation from time to time as a handyman, and, as was evident by this accident, from time to time as an employee, or at least an agent of their own.
Cusack and Tomoletz were compelled by virtue of the lease of the premises, 526 Bourbon Street, to "maintain during the
Obviously it was to cover their liability as the individual (joint) tenants of the premises that they secured this O.L. and T. liability policy for "personal" and "commercial" exposure.
We accept for present purposes the decision of the Court of Appeal and the majority herein, that Mr. Williams was not an employee in the course and scope of his employment with House of Decor, Inc. Yet Mr. Williams was doing the work of Cusack and Tomoletz by removing their refrigerator from premises as to which they were sub-lessors, at their request and for their advantage, at least in part.
I find it hard to understand how, under this liability policy, Gulf is not liable to the plaintiff for the injury he sustained through the negligence of Williams who was, if not an employee of the House of Decor, Inc., more than likely an employee in the course and scope of employment for Cusack and Tomoletz, in whose name the liability policy was issued.
The majority, in footnote six, contends that the plaintiff raised in this Court for the first time, Gulf's Liability on the basis that Gulf insured Cusack or Tomoletz individually, and that they were vicariously liable for Williams' fault. The majority is right; the argument was raised late.
Nonetheless, Gulf's policy (and other evidence) was introduced without objection, and Gulf was sued in the district court by the plaintiff.
For the reason, however, that the argument was raised belatedly, I essentially concur in the majority's not considering the argument at this time, but keeping alive plaintiff's right to sue Gulf as insurer of Cusack and Tomoletz. See footnote six of the majority opinion.