Edgewater Motels, Inc. v. Gatzke

• Decision Date: 26 January 1979
• Docket Number: No. 48328,48347.,48328
• Parties: EDGEWATER MOTELS, INC., Appellant-Respondent, v. A. J. GATZKE, Respondent-Appellant, B & D Corporation, Inc., d.b.a. The Bellows, Respondent, Walgreen Company, Respondent.
• Court: Minnesota Supreme Court

277 N.W.2d 11 (1979)

EDGEWATER MOTELS, INC., Appellant-Respondent, v. A. J. GATZKE, Respondent-Appellant B & D Corporation, Inc., d.b.a. The Bellows, Respondent Walgreen Company, Respondent.

Nos. 48328, 48347.

Supreme Court of Minnesota.

January 26, 1979.

Hanft, Fride, O'Brien & Harries and Tyrone P. Bujold and Richard R. Burns, Duluth, for appellant-respondent.

Taylor Law Firm and Elmer W. Foster, Jr., Minneapolis, for Gatzke.

Clarance E. Hagglund, Minneapolis, Joel M. Muscoplat, Minneapolis, for B & D Corp., Inc.

Johnson, Fredin, Killen, Thibodeau & Seiler and John J. Killen, Jr., Duluth, for Walgreen Co.

Heard before ROGOSHESKE, PETERSON, and SCOTT, JJ., and considered and decided by the court en banc.

SCOTT, Justice.

This matter consists of two consolidated appeals from the post-trial orders of the St. Louis County District Court. Plaintiff Edgewater Motels, Inc., and defendant A. J. Gatzke contend that the trial judge erred by ordering judgment for defendant Walgreen Company notwithstanding a jury verdict which found that Gatzke, a Walgreen employee, negligently caused a fire in plaintiff's motel while he was in the scope of his employment. Plaintiff also claims that the trial judge erred in refusing to set aside a jury finding that plaintiff's negligence caused 40 percent of the damages sustained by Edgewater. We reverse in part and affirm in part.

The fire in question broke out on August 24, 1973, in a room at the Edgewater Motel in Duluth, Minnesota, occupied by Arlen Gatzke. In July 1973, Gatzke, a 31-year Walgreen employee and then district manager, spent approximately three weeks in Duluth supervising the opening of a new Walgreen's restaurant. During that time, he stayed at the Edgewater Motel at Walgreen's expense. On about August 17, 1973, Gatzke returned to Duluth to supervise the opening of another Walgreen-owned restaurant. Again, he lived at the Edgewater at the company's expense. While in Duluth, Gatzke normally would arise at 6:00 a. m. and work at the restaurant from about 7:00 a. m. to 12:00 or 1:00 a. m. In addition to working at the restaurant, Gatzke remained on call 24 hours per day to handle problems arising in other Walgreen restaurants located in his district. Gatzke thought of himself as a "24 hour a day man." He received calls from other Walgreen restaurants in his district when problems arose. He was allowed to call home at company expense. His laundry, living expenses, and entertainment were items of reimbursement. There were no constraints as to where he would perform his duties or at what time of day they would be performed.

On August 23, 1977, Gatzke worked on the restaurant premises for about seventeen hours. This was the seventh consecutive day that he put in such long hours. One of his responsibilities that day was to work with Curtis Hubbard, a Walgreen district manager from another territory who was in Duluth to observe a restaurant opening and learn the techniques employed. Gatzke's supervisor, B. J. Treet, a Walgreen's regional director, was also present.

Between 12:00 and 12:30 a. m., Gatzke, Hubbard, Treet, and a chef left the restaurant in a company-provided car. The chef was dropped off at his hotel, the Duluth Radisson, and the other three proceeded to the Edgewater, where they each had a room. Upon arrival at the Edgewater, Treet went to his room. Gatzke and Hubbard decided to walk across the street to the Bellows restaurant to have a drink.

In about an hour's time Gatzke consumed a total of four brandy Manhattans, three of which were "doubles." While at the Bellows, Gatzke and Hubbard spent part of the time discussing the operation of the newly-opened Walgreen restaurant. Additionally, Gatzke and the Bellows' bartender talked a little about the mixing and pricing of drinks. The testimony showed that Gatzke was interested in learning the bar business because the new Walgreen restaurant served liquor.

Between 1:15 and 1:30 a. m. Gatzke and Hubbard left the Bellows and walked back to the Edgewater. Witnesses testified that Gatzke acted normal and appeared sober. Gatzke went directly to his motel room, and then "probably" sat down at a desk to fill out his expense account because "that was his habit from travelling so much." The completion of the expense account had to be done in accordance with detailed instructions, and if the form was not filled out properly it would be returned to the employee unpaid. It took Gatzke no more than five minutes to fill out the expense form.

While Gatzke completed the expense account he "probably" smoked a cigarette. The record indicates that Gatzke smoked about two packages of cigarettes per day. A maid testified that the ash trays in Gatzke's room would generally be full of cigarette butts and ashes when she cleaned the room. She also noticed at times that the plastic wastebasket next to the desk contained cigarette butts.

After filling out the expense account Gatzke went to bed, and soon thereafter a fire broke out. Gatzke escaped from the burning room, but the fire spread rapidly and caused extensive damage to the motel. The amount of damages was stipulated by the parties at $330,360.

One of plaintiff's expert witnesses, Dr. Ordean Anderson, a fire reconstruction specialist, testified that the fire started in, or next to, the plastic wastebasket located to the side of the desk in Gatzke's room. He also stated that the fire was caused by a burning cigarette or match. After the fire, the plastic wastebasket was a melted "blob." Dr. Anderson stated that X-ray examination of the remains of the basket disclosed the presence of cigarette filters and paper matches.

The jury found that Gatzke's negligence was a direct cause of 60 percent of the damages sustained by Edgewater. The jury also determined that Gatzke's negligent act occurred within the scope of his employment with Walgreen's. Plaintiff was found to be negligent (apparently for providing a plastic wastebasket) and such negligence was determined to be responsible for 40 percent of the fire damage sustained by Edgewater. The jury also decided that "The Bellows" was not liable.

Thereafter, Walgreen's moved for judgment notwithstanding the jury findings and, in the alternative, a new trial. Plaintiff moved to set aside the jury's findings that Edgewater was negligent and that such negligence was a direct cause of the fire. The district court granted Walgreen's motion for judgment notwithstanding the verdict, ruling that Gatzke's negligence did not occur within the scope of his employment, and denied all other motions.

The following issues are presented in this case:

(1) Did the trial court err in setting aside the jury finding that Gatzke's negligent conduct occurred in the scope of his employment?

(2) Did the trial court err in refusing to set aside the jury's findings that Edgewater was contributorily negligent and that such negligence was a direct cause of the damages sustained by Edgewater?

1. The granting of a judgment notwithstanding a jury verdict is a pure question of law. Ford v. Stevens, 280 Minn. 16, 157 N.W.2d 510 (1968). In reviewing the trial court's decision we apply the same standard as the trial court did in passing upon the jury verdict. See, Sikes v. Garrett, Minn., 262 N.W.2d 681 (1977). The applicable standard was articulated by this court in Cofran v. Swanman, 225 Minn. 40, 42, 29 N.W.2d 448, 450 (1947), as follows:

"A motion for judgment non obstante accepts the view of the evidence most favorable to the verdict and admits every inference reasonably to be drawn from such evidence, as well as the credibility of the testimony for the adverse party, and if the application of this rule, in the light of the evidence as a whole, discloses a reasonable basis for the verdict, the motion must be denied. Citations omitted.

* * * * * *

"* * * The power to set aside a verdict should be exercised sparingly. If, however, upon a search of the entire record, after taking the evidence in the light most favorable to the verdict and giving the adverse party the benefit of every inference reasonably deducible therefrom, the evidence as a whole manifestly and so overwhelmingly preponderates to the contrary as to be practically conclusive against the verdict, the motion for judgment non obstante should be granted. * * *"

It is reasonably inferable from the evidence, and not challenged by Walgreen's or Gatzke on appeal, that Gatzke's negligent smoking of a cigarette was a direct cause of the damages sustained by Edgewater. The question raised here is whether the facts of this case reasonably support the imposition of vicarious liability on Walgreen's for the conceded negligent act of its employee.

It is well settled that for an employer to be held vicariously liable for an employee's negligent conduct the employee's wrongful act must be committed within the scope of his employment. Seidl v. Trollhaugen, Inc., 305 Minn. 506, 232 N.W.2d 236 (1975); Nelson v. Nelson, 282 Minn. 487, 166 N.W.2d 70 (1969). As this court stated in Laurie v. Mueller, 248 Minn. 1, 4, 78 N.W.2d 434, 437 (1956):

"* * * This doctrine of vicarious liability of the master rests upon the sound principle that, if an employer expects to derive certain advantages from the acts performed by others for him, he, as well as the careless employee, should bear the financial responsibility for injuries occurring to innocent third persons as a result of the negligent performance of such acts. But this responsibility is not carried to the point where an employer is absolutely liable for every tortious act of his employees, and there is incorporated within the doctrine a requirement that the servant\'s acts must be within the scope of his employment in order that the employer may be held liable. * * *." (Footnotes omitted.)

To support a finding that an employee's negligent act occurred within his scope of employment, it must be shown that his conduct was, to some degree, in furtherance of...