Henderson v. Professional Coatings Corp.

• Decision Date: 24 October 1991
• Docket Number: No. 14541,14541
• Citation: 819 P.2d 84,72 Haw. 387
• Parties: Mary Kathleen HENDERSON, Plaintiff-Appellant, v. PROFESSIONAL COATINGS CORP. (John Doe 1), and John Phelps (John Doe 2), Defendants-Appellees, and Jerald W. Hughes, James McLean (John Doe 3), John Does 4-10, Jane Does 1-10, Doe Corporations 1-10, and Doe Partnerships 1-10, Defendants.
• Court: Hawaii Supreme Court

Page 84

819 P.2d 84

72 Haw. 387

Mary Kathleen HENDERSON, Plaintiff-Appellant, v. PROFESSIONAL COATINGS CORP. (John Doe 1), and John Phelps (John Doe 2), Defendants-Appellees,

and

Jerald W. Hughes, James McLean (John Doe 3), John Does 4-10,

Jane Does 1-10, Doe Corporations 1-10,

and

Doe Partnerships 1-10, Defendants.

No. 14541.

Supreme Court of Hawai'i.

Oct. 24, 1991.

Syllabus by the Court

1. Under the doctrine of respondeat superior, the employer is held accountable and liable for the negligent acts of its employees. However, recovery under the doctrine requires that the employee's act complained of must have been within the scope of employment.

2. Conduct of an employee is said to be within the course and scope of employment if 1) it is of the kind he is employed to perform, 2) it occurs substantially within the authorized time and space limits, and 3) it is actuated, at least in part, by a purpose to serve the employer.

3. Although generally, whether the employee is acting within the scope of his employment is a question of fact to be determined in the light of the evidence of each particular case, where the facts are susceptible of but one reasonable conclusion, the question may become a question of law for the court.

4. Employer's liability is limited by test of whether employer's risks are incident to his enterprise, or "enterprise theory," which finds liability if the enterprise of the employer would have benefited by the context of the act of the employee but for the unfortunate injury.

5. Under common law action of negligent entrustment, the plaintiff claims that the defendant was negligent in entrusting potentially dangerous automobiles to an incompetent driver.

6. In order to recover under theory of negligent entrustment there must be a showing that the facts giving rise to the alleged incompetency were known or should have been known to the entrustor at the time of the entrustment.

7. Under the test of negligent entrustment, the plaintiff must show that the entrustee's alleged incompetent or irresponsible behavior was known or was foreseeable to the entrustor.

8. The test of foreseeability is whether there is some probability of harm sufficiently serious that a reasonable and prudent person would take precautions to avoid it. It does not mean foreseeability of any harm whatsoever and it is not sufficient that injury is merely possible.

9. Under theory of negligent entrustment, the negligent entrustment of an automobile is irrelevant unless the person to whom it is entrusted acts in a negligent manner and in fact inflicts injury as the result of such conduct.

10. Pleadings should not be construed technically when determining what the pleader is attempting to set forth but should be construed liberally so as to do substantial justice.

11. Ordinarily, issues of negligence, including foreseeability, are not susceptible to summary adjudication. However, where the facts are undisputed or are susceptible of only one reasonable interpretation or conclusion, the trial court is under a duty to pass upon the question of negligence as a matter of law.

Alan Van Etten (Diane D. Hastert of Damon Key Bocken Leong & Kupchak, Honolulu, and Kenneth J. Kopicki of Seattle, Wash., with him on the brief), for plaintiff-appellant.

John S. Nishimoto (Patricia T. Fujii with him on the brief of Libkuman Ventura Ayabe Chong & Nishimoto), Honolulu, for defendants-appellees John Phelps and Professional Coatings Corp.

Before PADGETT, Acting C.J., HAYASHI, WAKATSUKI and MOON, JJ., and HEEN, Associate Judge, Intermediate Court of Appeals in Place of LUM, C.J., Recused.

MOON, Justice.

Plaintiff Mary Kathleen Henderson (Henderson) appeals from an order of the Fifth Circuit court granting summary judgment to defendants-appellees John Phelps (Phelps) and Professional Coatings Corp. (Professional Coatings). Henderson alleges that Phelps and Professional Coatings are liable for the acts of certain employees that led to an automobile accident in which Henderson was injured. Finding no liability under the theories of respondeat superior, negligent entrustment, or general negligence, we affirm.

I.

In this appeal, we must view the evidence in the light most favorable to Henderson to decide if there are any genuine issues of material fact and whether Professional Coatings and Phelps are entitled to summary judgment as a matter of law. Cuba v. Fernandez, 71 Haw. 627, 631, 801 P.2d 1208, 1211 (1990). In light of this standard of review, we have resolved any disputed facts in favor of Henderson. Based on this premise, the relevant facts are as follows:

On Sunday, May 3, 1987, at approximately 10:25 p.m., while traveling on Kuhio Highway near Princeville, Kauai, Henderson was injured when her automobile was struck head-on by an automobile driven by defendant Jerald W. Hughes (Hughes). The automobile Hughes was driving was one of two that had been rented by his employer, Professional Coatings, for use by its employees. Hughes and other employees of Professional Coatings, including defendant James McLean (McLean), had flown from Oahu to Kauai with Phelps, a part-owner of Professional Coatings. The employees' travel expenses were paid for by Phelps. They had flown to Kauai for a painting job that was to begin on Monday, May 4, which was scheduled to last approximately one month.

Before the flight to Kauai, Phelps and the employees drank beer. It was common for the crew to drink beer together. Phelps was aware that both Hughes and McLean were heavy drinkers. Phelps also believed that McLean drank 990 out of 1,000 days and considered McLean to be an alcoholic.

The crew arrived on Kauai on the day before the accident, and drove the rental cars to two condominium units in Poipu that Professional Coatings had rented for their use during the painting job. Several of the employees then used one of the rental cars, with Phelps's permission, to drive to the north shore of Kauai. The employees took turns driving. While Hughes was driving the car, it had a flat tire and the car became muddy or sandy. Phelps later reprimanded Hughes for this.

On the day of the accident, Phelps gave permission to McLean to use one of the rental cars so McLean could visit a friend in Princeville. Phelps did not accompany the group on their outing. However, Phelps knew that Hughes and two other employees would be going with McLean and that they would be drinking and partying.

McLean drove to Hanalei Beach Park where Hughes met a woman, who accompanied the rest of the group to a barbecue party at the home of McLean's friend in Princeville. Both McLean and Hughes, as well as the other workers, were drinking a great deal at the party. McLean became so inebriated that he could no longer drive, therefore, he decided to sleep at his friend's home. At some point early in the evening, McLean, while intoxicated, entrusted Hughes, who was also intoxicated, with the car. Hughes and his female companion went to her home and spent several hours there. When Hughes left to return to the party, the collision with Henderson occurred.

Henderson's amended complaint included the following allegations against Professional Coatings and Phelps: ¹ Count Five--Professional Coatings is liable for the alleged negligent driving of its employee, Hughes, under the theory of respondeat superior; Count Six--Professional Coatings is liable for the alleged negligent entrustment of the vehicle by its employee, McLean, to Hughes, under the theory of respondeat superior; Count Seven--Professional Coatings was the name under which Phelps conducted business and Phelps is thus liable for the negligent acts of his employees in the same manner as Professional Coatings is (i.e., under the theory of respondeat superior ); and Count Eight--Phelps is liable because he negligently entrusted the vehicle to McLean, which was the proximate cause of the accident.

II.

A. Respondeat Superior

Counts Five, Six, and Seven of the amended complaint are based upon the legal doctrine of respondeat superior. As explained in Kang v. Charles Pankow Associates, 5 Haw.App. 1, 7-8, 675 P.2d 803, 808 (1984): "Under this doctrine, 'the employer is held accountable and liable for the negligent acts of its employees.' However, recovery under the doctrine requires that the employee's 'act complained of must have been within the scope of the employment.' " (Citations omitted.) The Restatement (Second) of Agency § 228 (1958), delineates the scope of employment in pertinent part as follows:

(1) Conduct of a servant is within the scope of employment if, but only if:

(a) it is of the kind he is employed to perform;

(b) it occurs substantially within the authorized time and space limits; [and]

(c) it is actuated, at least in part, by a purpose to serve the master,....

* * * * * *

(2) Conduct of a servant is not within the scope of employment if it is different in kind from that authorized, far beyond the authorized time or space limits, or too little actuated by a purpose to serve the master.

Kang, 5 Haw.App. at 8, 675 P.2d at 808.

In Kang, employer Charles Pankow Associates' employee, Glen Pluid, was involved in an automobile accident on Kauai. Pluid, a resident of Oahu, was on Kauai to work on a construction project for Pankow in Princeville. Pluid's transportation to Kauai was paid by Pankow and Pluid was given a per diem allowance to cover housing and food expenses. Pluid had shipped his own vehicle to Kauai to use during the construction job, which was for an indefinite period.

One evening, while Pluid was driving his car, he collided with plaintiffs' vehicle. Plaintiffs claimed that Pankow was vicariously liable under the doctrine of respondeat superior. The circuit court granted summary judgment for Pankow, which the Intermediate Court of Appeals affirmed. The Court of Appeals noted the following:

Pluid was involved in the accident several hours after he had finished work for the day and left the job...