Favorito v. Pannell

Decision Date04 May 1994
Docket NumberNo. 93-2377,93-2377
Citation27 F.3d 716
PartiesChristine FAVORITO, et al., Plaintiffs, Appellants, v. Nicholas PANNELL, et al., Defendants, Appellees. . Heard
CourtU.S. Court of Appeals — First Circuit

Barry I. Fredericks, Englewood Cliffs, NJ, for appellants.

James T. Shirley, Jr., with whom Haight, Gardner, Poor & Havens, Francis X. Byrn, Jeanne-Marie Downey, New York City, Roberts, Carroll, Feldstein & Peirce and Dennis Roberts, Providence, RI, were on brief, for appellees.

BREYER, * Chief Judge, CAMPBELL, Senior Circuit Judge, and CYR, Circuit Judge.

CYR, Circuit Judge.

This admiralty action stems from a late evening boating accident which resulted in serious injuries to plaintiffs-appellants. Although plaintiffs obtained default judgments against the operator of the boat in which they were riding at the time of the accident, the district court directed entry of judgment as a matter of law in favor of defendant-appellee Pendragon Marine Ltd., the owner of the boat, and the plaintiffs appealed. Finding no error, we affirm.

I BACKGROUND

The S/Y DOLPHIN, a 75-foot sailing sloop, was moored in Newport Harbor for the 1990 charter season. She was crewed by Captain Gordon Percy, defendant Nicholas Pannell, the engineer, and Robert Sass, deckhand. On Friday, July 27, 1990, Captain Percy disembarked for a weekend in Cape Cod, leaving defendant Pannell in charge. Prior to disembarking, Percy instructed Pannell that he was not to bring guests aboard the yacht, the DOLPHIN's 12-foot inflatable tender was to be left on deck, and the public launch service (for which the DOLPHIN held a season's pass) was to be used for conveyance between the yacht and shore.

Appellants Christine Favorito and Lenka Viducic arrived in Newport the same day. As fate would have it, come evening Favorito and Viducic met defendant Pannell, who invited them and a third woman aboard the DOLPHIN for a party. Shortly after reaching the DOLPHIN via the public launch service, appellants asked to be returned to shore. By this time it was after midnight and the public launch service was no longer operating. Disregarding Captain Percy's orders, Pannell offered to ferry appellants to shore in the 12-foot inflatable tender. En route, the inflatable collided with two other vessels moored in the harbor. Investigators opined that Pannell had been operating the tender at an excessive speed. Favorito suffered facial lacerations and a broken jaw. Viducic received back injuries and a laceration to the forehead. Both required extensive reconstructive and cosmetic surgery.

Appellants instituted the present action in the District of Rhode Island against Pannell and appellee Pendragon Marine Ltd. In due course, the case came to trial. 1 On motion by Pendragon, the district court withdrew the case from the jury at the conclusion of

plaintiffs-appellants' case and directed entry of judgment as a matter of law pursuant to Fed.R.Civ.P. 50(a)(1) on the ground that no rational jury could find against Pendragon on any of the three causes of action.

II DISCUSSION

A judgment entered as a matter of law pursuant to Fed.R.Civ.P. 50(a)(1) is subject to plenary review under the same stringent standard incumbent upon the trial court in the first instance:

[W]e must examine the evidence and the inferences reasonably extractable therefrom in the light most hospitable to the nonmovant. To affirm withdrawal of any claim from the jury, we must find that, so viewed, the evidence would permit thoughtful factfinders to reach but one reasoned conclusion.

Fashion House, Inc. v. K-Mart Corp., 892 F.2d 1076, 1088 (1st Cir.1989). 2

A. Negligent Retention

The first cause of action we address is a variant on the traditional tort of negligent hiring: "an employer has a [continuing] duty to retain in its service only those employees who are fit and competent." Welsh Manuf. v. Pinkerton's, Inc., 474 A.2d 436, 441 (R.I.1984) (emphasis added) (citing, e.g., Di Cosala v. Kay, 91 N.J. 159, 450 A.2d 508 (1982)). An employer is not responsible for employee torts committed outside the scope of employment unless the employer (1) had "reason to know of the particular unfitness, incompetence or dangerous attributes of the employee" and (2) "could reasonably have foreseen that such qualities created a risk of harm to other persons." Di Cosala, 450 A.2d at 516 (emphasis added); accord Johnson v. Usdin Louis Co., 248 N.J.Super. 525, 591 A.2d 959, 961 (1991).

One week after joining the DOLPHIN's crew, defendant Pannell was stopped by the Harbormaster for exceeding the 5 m.p.h. speed limit in Newport Harbor, and received a warning. On June 27, Pannell again was stopped for exceeding the 5 m.p.h. limit, and received a ticket. The next day Captain Percy was summoned to the Harbormaster's office, where he was informed that it was his responsibility to ensure that his crew adhered to harbor rules, and that further infractions could result in the DOLPHIN's exclusion from Newport Harbor. Captain Percy in turn delivered a stern lecture to Pannell and Sass.

There were no further incidents, and the record contains no evidence of recklessness or other unreliability on the part of Pannell, until the date of the accident approximately one month later. Indeed, Percy testified that he had been pleased with Pannell's overall performance and described Pannell as a good engineer and a responsible crewman. Appellants presented no evidence to the contrary.

Appellants contend that a jury could reasonably have found that Captain Percy was negligent to retain Pannell after learning of the two speeding incidents, and they insist that dismissal from employment was Pendragon's only recourse. We conclude, however, that the district court judgment is amply supported by the record evidence viewed in the light most favorable to appellants.

Appellants do not identify, let alone consider, the particular employee qualities most pertinent to their negligent retention claim. This would be a very different case were the appropriate inquiry (as appellants would have it) whether Captain Percy had reason to believe that Pannell might speed in the harbor. However, the proper threshold inquiry--the sine qua non to appellants' negligent retention claim--is whether there is any evidence that Captain Percy had "reason to know," see Di Cosala, 91 N.J. 159, 450 A.2d at 516, that Pannell might misappropriate the DOLPHIN's tender for personal use in direct violation of the Captain's order. 3

It would not be reasonable to infer--based solely on the two speeding incidents--that Captain Percy should have foreseen, see id., that Pannell would disobey a direct order by transporting personal guests in the DOLPHIN's tender during the Captain's absence. And absent any evidence that it was not reasonable for Captain Percy to rely on the adequacy of the precautions taken before disembarking, the prior speeding incidents did not give rise to a reasonably foreseeable "risk of harm to other persons," id., and the negligent retention claim fails as a matter of law.

The district court correctly rejected the position that an employee must be dismissed in such circumstances without regard to the adequacy of the employer's precautions against a recurrence of the relevant employee conduct. See Usdin Louis, 248 N.J.Super. 525, 591 A.2d at 961-62. "Public policy dictates that there should be no liability absent a showing that the employer reasonably should have foreseen an unreasonably enhanced hazard." Id. We hold that a negligent retention claim does not lie absent sufficient evidence to enable a rational factfinder to infer that the employer reasonably should have foreseen that its precautions were inadequate to protect persons in appellants' position from an unreasonable risk of harm resulting from a recurrence of the employee behavior of which the employer had prior notice.

B. Negligent Entrustment

The second cause of action asserts that Pendragon negligently entrusted the tender to Pannell. Rhode Island essentially hews to the common law rule, see Sabourin v. LBC, Inc., 731 F.Supp. 1145 (D.R.I.1990) (surveying Rhode Island law), that "the owner ... may be held liable for entrusting [its] vehicle to an incompetent, reckless or unfit driver if the owner knew or should have known of the driver's incompetence, inexperience or recklessness." Id. at 1148. 4 A rational factfinder could find no entrustment on this evidence.

Appellants focus almost exclusively on whether it was negligent for Captain Percy to entrust the tender to Pannell, when in fact there was no entrustment, negligent or otherwise. There is no evidence that Captain Percy permitted Pannell to use the tender in his absence. Rather, the uncontroverted deposition testimony of Captain Percy established that he prohibited guests, directed Pannell to utilize the public launch service, and forbade use of the DOLPHIN's tender or dinghy. 5

Were it not for the unusual procedural posture, our discussion of the negligent entrustment claim would be at an end. It was appellants who introduced Captain Percy's deposition into evidence, notwithstanding the fact that it cut sharply against their negligent entrustment claim. On appeal, however, appellants urge us to vacate the district court judgment because the jury might have disbelieved Captain Percy's deposition testimony. In other words, appellants argue, judgment as a matter of law was improper because the jury might not have believed that Percy forbade Pannell to use the tender.

The Supreme Court has pointed out that Rule 50 (judgment as a matter of law) and Rule 56 (summary judgment) "mirror" one another. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). See also Fed.R.Civ.P. 50 advisory committee's notes accompanying 1991 amendment (stating that incorporation of the Rule 56 "judgment as a matter of law" standard into Rule 50 was intended to "link the[se]...

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