Defenses and Damages- Module 5 of 5
Module V: Vicarious Liability -Defenses and Damages
Courts may hold employers, such as corporations and hospitals, and individuals, such as automobile owners and parents, vicariously liable for employees’ or others’ misconduct. However, employers and individuals may assert legally cognizable defenses that reduce and, in some circumstances, eliminate the damages to which an injured party may be entitled.
In this module, we will examine the defenses that employers or individuals may assert when faced with vicarious liability, namely: (1) contributory and comparative negligence; (2) causation, arguing that the injury was not a direct and reasonably foreseeable result of the employer’s or individual’s negligence; and (3) assumption of risk. We will also examine the types of damages – punitive and compensatory – that employers or individuals may face if deemed vicariously liable for employees’ or others’ misconduct.
Contributory and Comparative Negligence
Contributory and comparative negligence are valid legal defenses to vicarious liability that may reduce or eliminate the damages to which an injured party may otherwise be entitled.
When asserting a contributory negligence defense, the employer is essentially arguing that the injured person, due to his own negligence, was substantially responsible for his injuries. If a defendant is successful in asserting a contributory negligence defense, the injured person will not be entitled to any damages – even if the injured person was only slightly at fault.
However, in most jurisdictions, employers are not permitted to assert a contributory negligence defense against their employees and thus shield themselves from liability for employees’ misconduct. Rather, an employer can only assert this defense against the injured party seeking to hold an employer liable.
Let’s consider one example to illustrate how this principle is applied.
Skadden, Smith, Cravath, & Weiss, a nationally-respected law firm in New York City, holds its annual holiday party for all attorneys and staff at the Four Seasons restaurant. During the party, one of the firm’s managing partners consumes substantial amounts of alcohol and is visibly intoxicated. While driving home, the partner strikes a pedestrian who was walking across the street despite a sign that clearly stated, Don’t Walk, causing injuries, and the pedestrian sues Skadden, Smith, Cravath, & Weiss for damages. If a jury finds that the partner was predominantly responsible for the accident and the pedestrian was only slightly responsible, the pedestrian can be barred from recovering damages.
The comparative negligence defense is, in nearly all respects, identical to contributory negligence. The one exception is that if a defendant successfully asserts a comparative negligence defense, it will merely reduce, rather than eliminate, the damages an injured party may recover. Consequently, damages will be apportioned between the employer and injured party based on the degree to which each party directly and proximately caused such damages. Comparative negligence, rather than the harsher contributory negligence, governs the rules in most states.
Let’s consider one example to illustrate how this principle is applied.
A motorist is involved in a car accident with an employee of General Trucking Company, sustains serious injuries, and sues the employer for $150,000, alleging that the employer is liable for the employee’s misconduct. During trial, the employer’s attorney adduces evidence that, at the time of the accident, the motorist was speeding and, as such, the jury returns a verdict holding the employer 50% responsible and the motorist 50% responsible. As a result, the motorist’s recoverable damages will be $75,000.
Some states have enacted a modified comparative negligence defense in which damages are apportioned between the parties unless the injured party is deemed to be fifty percent or more at fault. In this situation, the injured party is not entitled to recover any damages.
Causation and Foreseeability
In some circumstances, an employer may avoid vicarious liability by claiming that the employer’s – or employee’s – actions were not the cause in fact and proximate cause of the claimant’s injuries.
Cause in fact is a relatively straightforward legal standard. Injured parties can satisfy this standard by demonstrating that the employer or employee was the actual cause of the injury. In other words, if an injured party can show that “but for” the employer’s or employee’s actions or omissions, the injury would not have occurred, the cause in fact element is met.
Proximate causation is more complicated and often presents a challenge to injured parties seeking to recover damages. To demonstrate proximate causation, a claimant must demonstrate that the injuries suffered were the reasonably foreseeable result of the employer’s or employee’s misconduct or, at the very least, a “substantial factor” in causing such injuries. If, for example, an employer or employee engaged in negligent conduct but the claimant’s injuries are disconnected from or unrelated to such negligence, or if intervening and superseding events occurred that severed the nexus between the negligence and injuries, recovery may be precluded.
In the vicarious liability context, the rules governing direct and proximate causation are relevant to the extent that an employer may be held vicariously liable. If an employee, under the direction, control, and supervision of the employer, engages in misconduct while acting within the scope of employment, the employer will almost always be held vicariously liable for any resulting injuries. The courts impose strict liability on the employer, which means that the employer is responsible for compensating the injured party regardless of the employer’s involvement or fault if “the employee's conduct should fairly have been foreseen from the nature of the employment and the duties relating to it.”
On the other hand, if an employee is acting outside the scope of employment, the employer will, in most circumstances, not be held vicariously liable.
For example, assume that an employer operating a pizza delivery company creates a rule that all drivers must deliver take-out orders to residential customers within twenty minutes or face termination. Naturally, this leads the drivers, in an effort to comply with this rule, to sometimes exceed the speed limit and engage in reckless driving. Unfortunately, on one occasion, a driver races through a stop sign and strikes two pedestrians. The employer will be held vicariously liable for the driver’s misconduct, because it was certainly foreseeable that, as a direct and proximate result of the twenty-minute rule, the drivers might operate their vehicles in a dangerous manner.
Now, assume the same facts but, instead of driving through a stop sign, the driver, during a rainstorm, accidentally strikes the back of a motorist’s car at ten miles per hour because the vehicle briefly hydroplanes. The motorist exits the car enraged, grabs a baseball bat, and strikes the driver’s windshield. A person walking across the street witnesses the incident and attempts to intervene and calm the motorist. In response, the motorist strikes the person with the baseball bat. Here, the employer will not be liable because it was not foreseeable that, as a result of requiring drivers to deliver take-out orders to residential homes in twenty minutes, it would lead to a motorist committing a violent criminal act.
Direct and proximate causation are also relevant in situations where the employer faces vicarious liability for negligently hiring, retaining, or supervising an employee. In these situations, the courts will inquire whether the injuries were a reasonably foreseeable result of the employer’s negligence in hiring, retaining, or supervising the employee.
Let’s consider an example.
Tom’s Construction Company hires Victor, a well-respected construction worker with twenty years’ experience, to build the foundations of several small homes that Tom’s Construction Company is constructing. One day, while on the job, Victor decides to take the day off and calls his friend, David, asking that David travel to the job site and continue building the concrete foundation. David agrees even though he has very little experience in this type of work. While David is working, two construction workers who are building a house nearby ridicule David for what they perceive as a substandard performance. David loses his temper and assaults both men, injuring one of them severely. Tom’s Construction Company is not liable because they could not possibly foresee that Victor would take the day off and hire an incompetent worker to perform tasks that Victor was assigned.
Assumption of Risk
Employers and individuals facing vicarious liability may also rely on the assumption of the risk doctrine, which states that a person who is aware of and knowingly accepts the risks inherent in a given activity cannot recover damages for injuries resulting from such risks. Thus, to successfully assert this defense, an employer or individual must demonstrate that the injured party: (1) had knowledge of the risks involved; and (2) voluntarily and knowingly accepted those risks.
Assumption of the risk may be express or implied. Express assumption of the risk typically occurs where someone signs an agreement, such as a waiver form, stating that she is aware of the dangers inherent in an activity and knowingly accepts those risks. Implied assumption of the risk exists where her knowledge of and consent to the risks of the activity are discernable from her words or actions.
Whether an injured party expressly or implicitly assumed a risk has important consequences for the damages that may be recovered for such injuries. In circumstances where the plaintiff expressly assumes a risk inherent in an activity, courts will not permit her to recover any damages. However, if the injured party, through words or actions, implicitly assumed a risk, the party may still recover at least some damages if the decision to assume that risk is considered reasonable.
In all cases, the assumption of the risk doctrine only applies to injuries relating to the risk that was assumed. If the injury results from events unrelated to the assumed risk, the assumption of risk is irrelevant.
Finally, as with contributory negligence, an employer cannot assert an assumption of the risk defense against employees. The doctrine can only be asserted against the injured party that is seeking to hold an employer or individual vicariously liable.
Let’s consider two examples.
Tom and Sara decide to conquer their fear of flying by going skydiving at Paradise Flying Academy. Upon arrival, Tom and Sara are required to participate in a thirty-minute training session in which they are assigned instructors who will skydive with each of them to ensure that the parachutes are properly deployed and the landing occurs safely. Tom and Sara are also given a one-page sheet stating that “skydiving is a risky activity, and those risks include adverse physical reactions upon jumping out of a plane at 5,000 feet, potential malfunctions with the harnesses or parachute, and hard landings that may cause injury. Notwithstanding, at Paradise Flying Academy over 99% of skydiving events occur without incident, and skydiving is generally considered very safe.” While skydiving, Sara’s instructor discovers that one of the parachutes is not working and is forced to deploy a smaller and less protective emergency parachute. This results in a very hard landing, and Sara suffers a broken leg. Sara will likely recover at least some damages because, although Sara implicitly assumed the risk of skydiving, her decision to do so, based on Paradise Flying Academy’s safety record, was reasonable.
Mike and his friends decide to spend Saturday afternoon at Titan Amusement Park, where they are excited to ride a new roller coaster called Anti-Gravity, which is twenty stories high and travels at speeds approaching 100 miles per hour. Before they get on the roller coaster, a sign reads “Proceed with caution. This roller coaster operates at extremely high speeds and is not suitable for individuals with heart conditions or other related illnesses.” Mike and his friends are about to be strapped into Anti-Gravity when, from several stories above, a piece of the roller coaster’s track breaks off and strike’s one of Mike’s friends, fracturing his collarbone and shoulder. In this situation, Mike’s friend can recover damages because the accident was completely unrelated to the risks assumed when riding Anti-Gravity.
If an employer or individual is deemed vicariously liable for employees’ or others’ misconduct and fails to assert a meritorious defense, he will be required to compensate the injured party for the resulting damages. This will ordinarily include compensation for bodily injuries, medical bills, property damage, and lost wages. In some cases, an injured party may also recover damages for pain and suffering, mental distress, reduced quality of life or shortened lifespan and/or loss of anticipated wages. The goal is to fully compensate an injured party for all losses incurred because of the employees’ or individuals’ misconduct.
Punitive damages are not intended to compensate an injured party, but instead to punish a wrongdoer who engages in conduct that is unusually egregious, reckless, or reprehensible. In most actions involving vicarious liability, punitive damages will not be available because the primary legal basis for imposing such liability – employees’ or other individuals’ negligence – results from unreasonable or careless actions and do not typically rise to the level of reckless or egregious misconduct.
Notwithstanding, in cases where an injured party can meet this high standard and obtain punitive damages, the monetary award can substantially exceed a compensatory damage award. Of course, a jury or court must ensure that a punitive damage award is proportionate to the severity of the defendant’s misconduct and not so outlandish that it leads to an unjust result. Specifically, when deciding on a punitive damage amount, courts must consider: (1) the reprehensibility of the defendant’s conduct; (2) the ratio between the compensatory damages award and the punitive damages award; and (3) the difference between the punitive damages award and the civil penalties authorized or imposed in comparable cases.
Although employers and individuals may face vicarious liability for employees’ or others’ misconduct, they may assert several defenses that reduce, and possibly eliminate, the damages an injured party may recover. Contributory and comparative negligence, causation, and assumption of risk are among the more commonly-asserted defenses. If a court or jury determines that a claimant was negligent in causing the alleged injuries, that the injuries were not a reasonably foreseeable result of an employee’s or individual’s misconduct or that an injured party assumed the risk of injury, an employer’s or individual’s liability may be substantially, if not entirely, reduced. When analyzing whether employers or individuals may face liability, always be sure to consider whether any of these defenses apply.
 This section only applies to individuals deemed employees, as employers are generally not vicariously liable for independent contractors’ misconduct.
 See, e.g., Baskett v. Banks, 45 S.E.2d 173, 177 (Va. 1947); Board of County Comm’r of Garrett County v. Bell Atlantic, 695 A.2d 171, 181 (Md. 1997).
 See generally Gross v. FBLFinancial Services, Inc., 557 U.S. 167, 176-77 (2009)
 See generally, CSX Transportation, Inc. v.McBride, 564 U.S. 685, 692-93 (2011); Palsgraf v. Long Island R.Co., 162 N.E. 99, 102-05 (N.Y. 1928) (Andrews, J., dissenting) (discussing the foreseeability standard of proximate cause).
 General Counsel, Summary of District of Columbia Laws, Catholic University of America, http://counsel.cua.edu/dclaw/perslnj/General.cfm (last visited May 25, 2018).
 See, e.g., Sheppard v. Midway R-1 Sch. Dist., 904 S.W.2d 257, 261 (Miss. Ct. App. 1995)
 See id. (“Express assumption of risk occurs when the plaintiff expressly agrees in advance that the defendant owes him no duty.”); see also Martin v. Buzan, 857 S.W.2d 366, 369 (Miss. Ct. App. 1993).
 See Sheppard, 904 S.W.2d at 261-62.
 See id.
 See, e.g., State Farm Mut. Auto. Ins. Co.v. Campbell, 538 U.S. 408, 416 (2003); Tichenor v. Santillo, 527 A.2d 78, 84 (N.J. Super. Ct. App. Div. 1987).
 See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. at 418.