Employer found not liable for an employee’s tortious injuries to a guest who accompanied the employee since not in futherance of employer’s business: MID-STATE PLASTICS, INC. V. EST. OF WILLIAM CLINTON BRYANT (SC 2/21/2008)

MID-STATE PLASTICS, INC. V. EST. OF WILLIAM CLINTON BRYANT
TORTS: EMPLOYER LIABILITY
2006-SC-000425-DG.pdf
PUBLISHED: REVERSING
OPINION BY SCHRODER, CUNNINGHAM NOT SITTING; LAMBERT DISSENTS BY SEP. OP
DATE RENDERED: 2/21/2008

In this case, the Kentucky Supreme Court addresses the sole issue of whether an employer is liable for an employee’s tortious injuries to a guest who accompanied the employee on a business trip. The factual background of the case is as follows: An employee of Appellant (actually, its President, General Manager and Chief Executive) leased a plane and personally flew it out of state on a business trip. He invited a pastor friend to ride along with him free of charge so that he visit his family while the employee worked. Unfortunately, the plane struck a cell tower on the return trip killing both of them. The pastor’s estate sued the employee’s estate and the Appellant employer premised on vicarious liability. The TC granted Summary Judgment to Appellant in a bare-bones order. The estate appealed, and the COA reversed on its determination that factual issues had to be resolved as to whether Appellant had actual knowledge of employee’s practice of allowing non-business passengers to accompany him on business trips, and if so, whether Appellant failed to object. The Appellant appealed and the SC granted review.

The SC begins its Opinion by citing Wigginton Studio v. Reuter’s Adm’r, 254 Ky. 128, 71 S.W.2d 14 (1938) as controlling precedent with similar case facts. In that case, Kentucky’s highest court at the time held that not only does the employee have to be acting within the scope of his/her authority in inviting the guest, but also the guest’s presence must be determined to be in furtherance of the employer’s business. As applied to the present case facts, the SC held that the pastor’s presence could not be construed as being for the purpose of accomplishing the Appellant’s work. He accompanied the employee for purely personal reasons. This result is not changed by the fact that the pilot was an officer of the Appellant rather than mere low-level employee. The SC renounced the COA’s reasoning in its decision that when an employer is aware that the employee invites guests and does nothing to enforce a "no rider" rule, the guest become an invitee of the employer and exposes it to liability for the harmful actions of its employees. While the COA noted that its position had been adopted by a number of other states, the SC held that the COA’s decision completely ignores the second requirement of Wigginton that the guest’s presence must further the employer’s business.

Chief Justice Lambert was the sole dissenter, arguing that the real issue for determining potential vicarious liability is whether the trip itself furthered the Appellant’s business, not whether the pastor’s presence benefited Appellant.

By Chad Kessinger, Schiller Osbourn Barnes & Maloney