Beul et al v. ASSE International et al

• Decision Date: 15 November 2000
• Docket Number: No. 99-3978,99-3978
• Citation: 233 F.3d 441
• Parties: (7th Cir. 2000) Kristin Beul, et al., Plaintiffs-Appellees, v. ASSE International, Inc., et al., Defendants-Appellants,
• Court: U.S. Court of Appeals — Seventh Circuit

Page 441

233 F.3d 441 (7th Cir. 2000)

Kristin Beul, et al., Plaintiffs-Appellees, v. ASSE International, Inc., et al., Defendants-Appellants,

No. 99-3978

In the United States Court of Appeals For the Seventh Circuit

Argued September 7, 2000

Decided November 15, 2000

Appeal from the United States District Court for the Eastern District of Wisconsin. No. 98-C-426--Myron L. Gordon, Judge. [Copyrighted Material Omitted]

[Copyrighted Material Omitted]

Before Bauer, Posner, and Evans, Circuit Judges.

Posner, Circuit Judge.

In this diversity suit for negligence, governed (so far as the substantive issues are concerned) by Wisconsin law, the jury returned a verdict finding that plaintiff Kristin Beul's damages were $1,100,000 and that she was 41 percent responsible for them; in accordance with the verdict, judgment was entered against defendant ASSE International for $649,000 (59 percent of $1.1 million). The other parties can be ignored. The appeal raises issues of both tort law and civil procedure.

The defendant is a nonprofit corporation that operates international student exchange programs. For a fee of $2,000 it placed Kristin, a 16-year-old German girl who wanted to spend a year in the United States, with the Bruce family of Fort Atkinson, Wisconsin. The family, which consisted of Richard Bruce, age 40, his wife, and their 13-year-old daughter, had been selected by Marianne Breber, the defendant's Area Representative in the part of the state that includes Fort Atkinson. Breber is described in the briefs as a "volunteer," not an employee; the only payment she receives from ASSE is reimbursement of her expenses. Nothing in the appeal, however, turns either on her "volunteer" status or on ASSE's nonprofit status. Charities are not immune from tort liability in Wisconsin, Kojis v. Doctors Hospital, 107 N.W.2d 131 (Wis. 1961), and ASSE does not deny that if Breber was negligent it is liable for her negligence under the doctrine of respondeat superior, even though she was not an employee of ASSE. The doctrine is nowadays usually described as making an employer liable for the torts of his employees committed within the scope of their employment, but strictly speaking the liability is that of a "master" for the torts of his "servant" and it extends to situations in which the servant is not an employee, provided that he is acting in a similar role, albeit as a volunteer. E.g., Heims v. Hanke, 93 N.W.2d 455, 457- 58 (Wis. 1958), overruled on other grounds by Butzow v. Wausau Memorial Hospital, 187 N.W.2d 349, 353-54 (Wis. 1971); Morgan v. Veterans of Foreign Wars, 565 N.E.2d 73, 77 (Ill. App. 1990); Restatement (Second) of Agency sec. 225 (1958). In Morgan, as in this case, the defendant was a charity.

There is also no argument that the contract between ASSE and Kristin's parents is the exclusive source of ASSE's legal duties to Kristin. Negligence in the performance of a contract that foreseeably results in personal injury, including as here emotional distress, is actionable under tort law. See, e.g., Kuehn v. Childrens Hospital, 119 F.3d 1296 (7th Cir. 1997). As we pointed out in Rardin v. T & D Machine Handling, Inc., 890 F.2d 24, 29 (7th Cir. 1989), "tort law is a field largely shaped by the special considerations involved in personal-injury cases, as contract law is not. Tort doctrines are, therefore, prima facie more suitable for the governance of such cases than contract doctrines are" even when victim and injurer are linked by contract. See also Fireman's Fund American Ins. Cos. v. Burns Electronic Security Services, Inc., 417 N.E.2d 131, 134 (Ill. App. 1980).

As the sponsor of a foreign exchange student, ASSE was subject to regulations of the United States Information Agency that require sponsors to train their agents, "monitor the progress and welfare of the exchange visit," and require a "regular schedule of personal contact with the student and host family." 22 C.F.R. sec.sec. 514.10(e)(2), 514.25 (d)(1), (4) (now sec.sec. 62.10(e)(2), 62.25(d)(1), (4)). These regulations are intended for the protection of the visitor, see "Exchange Visitor Program," 58 Fed. Reg. 15,180, 15,190 (1993) (statement of USIA accompanying promulgation of 26 C.F.R. sec. 514.25), and the jury was therefore properly instructed, under standard tort principles not challenged by ASSE, that it could consider the violation of them as evidence of negligence. There is no argument that the regulations create a private federal right of suit that would allow the plaintiffs to sue ASSE under the federal-question jurisdiction of the federal courts (and we have found no case suggesting there is such a right), or that Wisconsin is legally obligated to use the regulations to define the duty of care of a sponsor sued under state tort law. (In other words, there is no argument that the federal regulations have preemptive force in state tort litigation.) But the district court was entitled to conclude that a state court would look to the regulations for evidence of the sponsor's duty of care. Courts in tort cases commonly take their cues from statutes or regulations intended to protect the safety of the class to which the tort plaintiff belongs. See, e.g., Bennett v. Larsen Co., 348 N.W.2d 540, 548-49 (Wis. 1984).

ASSE is also a member of a private association of sponsors of foreign exchange students, the Council on Standards for International Educational Travel, which requires members to "maintain thorough, accurate, and continual communication with host families and school authorities." A jury could reasonably consider the Council's statement as additional evidence of the standard of care applicable to sponsors and it could also accept the plaintiff's argument that due care required Breber to try to develop rapport with Kristin so that Kristin would trust and confide in her and so that Breber could pick up any signals of something amiss that Kristin might be embarrassed to mention unless pressed.

Kristin Beul arrived in Wisconsin from Germany on September 7, 1995, and was met at the airport by Richard Bruce and his daughter. Marianne Breber did not go to the airport to meet Kristin. In fact, apart from a brief orientation meeting at a shopping mall in September with Kristin and one other foreign exchange student, at which Breber gave Kristin her phone number, she didn't meet with Kristin until January 21 of the following year-- under unusual circumstances, as we'll see. She did call the Bruce home a few times during this period and spoke briefly with Kristin once or twice, but she made no effort to make sure that Kristin was alone when they spoke. She would ask in these calls how Kristin was doing and Kristin would reply that everything was fine. Breber did not talk to Mrs. Bruce, who would have told her that she was concerned that her husband seemed to be developing an inappropriate relationship with Kristin.

Kristin had led a sheltered life in Germany. She had had no sexual experiences at all and in fact had had only two dates in her lifetime. On November 17, 1995, Richard Bruce, who weighed almost 300 pounds and who was alone at home at the time except for Kristin, came into the loft area in which she slept and raped her.

This was the start of a protracted sexual relationship. In the months that followed, Bruce frequently would call the high school that Kristin was attending and report her ill. Then, with Mrs. Bruce off at work and the Bruce's daughter at school, Bruce would have sex with Kristin. By February 22, Kristin had been absent 27 days from school. Bruce brandished a gun and told Kristin that he would kill himself if she told anyone what they were doing together.

Curiously, in January Bruce and Kristin called Marianne Breber and told her that Mrs. Bruce appeared to be jealous of the time that her husband was spending with Kristin. Bruce invited Breber to dinner on January 21. Breber did not meet privately with either Kristin or Mrs. Bruce on that occasion, and she observed nothing untoward. In February, however, Mrs. Bruce told Breber that she and her husband were getting divorced, and Breber forthwith found another host family to take in Kristin. Kristin didn't want to leave the Bruce home, but on February 22 Breber arrived there with a sheriff's deputy to remove Kristin. The deputy asked Kristin in the presence of Richard Bruce and his daughter whether there was any inappropriate sexual activity between Richard and Kristin, and Kristin answered "no." The same day Breber, upon calling Kristin's school to tell them that Kristin would be out for a few days in connection with her change of residence, learned for the first time of Kristin's many absences.

Kristin lived with Breber for a few days between host families, but Breber didn't use the occasion to inquire about any possible sexual relationship between Kristin and Bruce. Breber told the new host family that Kristin was not to contact Bruce for a month, but she did not tell Bruce not to have any contact with Kristin. They continued to correspond and talk on the phone. Kristin had decided that she was in love with Bruce and considered herself engaged to him.

In April, Mrs. Bruce discovered some of Kristin's love letters and alerted the authorities. A sheriff's deputy interviewed Bruce. The next day Bruce, who had committed a misdemeanor by having sex with a 16 year old, Wis. Stat. sec. 948.09, killed himself, leaving a note expressing fear of jail. It is undisputed that the events culminating in Bruce's suicide inflicted serious psychological harm on Kristin; the jury's assessment of her damages is not claimed to be excessive.

The defendant argues that it was entitled to judgment as a matter of law, or alternatively to a new trial because of trial error. The first argument divides into three: there was insufficient proof of a causal relationship between the defendant's negligence in failing to keep closer tabs on Kristin Beul and her sexual involvement with Bruce...