Kennedy v. Western Sizzlin Corp.
| Citation | 857 So.2d 71 |
| Parties | Ronda K. KENNEDY v. The WESTERN SIZZLIN CORPORATION. Lisa M. Pate v. The Western Sizzlin Corporation. Eloise E. Webb et al. v. The Western Sizzlin Corporation. |
| Decision Date | 07 March 2003 |
| Court | Supreme Court of Alabama |
Desmond V. Tobias of Windom & Tobias, L.L.C., Mobile, for appellants Ronda K. Kennedy and Lisa M. Pate.
John D. Saxon and Symantha Christeen Thomas of John D. Saxon, P.C., Birmingham; and Tammy C. Woolley of Gorham & Waldrep, P.C., Birmingham, for appellants Eloise Webb, Rebecca R. Frye, Hope Daniels Cassidy, Emma Diane Foley, Wyonia Lipscomb, and Jeannette T. Lassiter.
Kenneth A. Hitson, Jr., of Nix, Holtsford, Gilliland, Higgins & Hitson, P.C., Daphne; and Mickey Womble, Monroeville, for appellee.
Ronda Kennedy, Lisa Pate, Eloise Webb, Rebecca Frye, Hope Daniels Cassidy, Emma Diane Foley, Wyonia Lipscomb, and Jeanette Lassiter appeal from summary judgments entered in favor of The Western Sizzlin Corporation ("WSC") on several claims alleging vicarious tort liability and negligence. This appeal presents two issues: (1) whether an agency relationship existed between WSC and its franchisee; and (2) whether WSC, in moving for a summary judgment, properly shifted the burden of proof as to each of the direct-negligence claims brought by Kennedy and Pate (case nos. 1010804 and 1010805).
We hold that an agency relationship did not exist between WSC and its franchisee and, therefore, that summary judgments for WSC on the claims alleging vicarious liability and negligent or wanton hiring, training, supervision, and retention were proper. However, we also hold that WSC did not meet its burden of proof when moving for a summary judgment on the direct-negligence claims brought by Kennedy and Pate, and, therefore, that summary judgments on those claims were improper. Consequently, we affirm in part, reverse in part, and remand in case no. 1010804 and case no. 1010805, and we affirm in case no. 1011210.
Bryan Kogut and Robert Lambert are the sole stockholders of Lambert Restaurant Company, Inc. ("LRC"). In January 1998, Kogut and Lambert, in their individual capacities and on behalf of LRC, entered into an agreement with WSC pursuant to which LRC obtained a franchise to operate a Western Sizzlin restaurant in Monroeville. Kogut served as the president of LRC, and Lambert served as the vice president, managing the daily operations of the restaurant. The restaurant first opened for business on Mother's Day 1998.
Lambert has a history of sexual misconduct and sexual harassment in the workplace, including a criminal conviction for attempted sexual abuse. Before managing the Western Sizzlin restaurant, Lambert had worked as a district manager for the Waffle House restaurant chain in Florida. Waffle House terminated Lambert's employment following its investigation of a sexual-harassment claim.
Kennedy, Pate, Webb, Frye, Cassidy, Foley, Lipscomb, and Lassiter are all former employees of the Western Sizzlin restaurant in Monroeville. On August 1, 1998, Webb contacted Kogut after several employees reported that Lambert had sexually harassed them.1 Kogut spoke to Lambert about those allegations and instructed him that he should not return to the restaurant. Lambert did not return to the restaurant until some time in late November 1998.
On August 3, 1998, Kogut called Jerry Plunkett, director of franchise operations at WSC, to inform him of the sexualharassment allegations the employees had made against Lambert. Kogut also asked Plunkett whether, in light of those allegations, there was anything he could do to terminate the franchise agreement as to Lambert. Plunkett responded that legally WSC could do nothing under the franchise agreement unless and until Lambert was arrested or criminally charged.
On November 5, 1998, Cassidy filed with the Equal Employment Opportunity Commission ("EEOC") a sexual-harassment charge against Lambert, in his capacity as one of the owners of the Western Sizzlin restaurant in Monroeville. The other employees in this case filed similar complaints during the succeeding months. On September 11, 2000, the EEOC issued determination letters regarding the merits of each of those claims, finding reasonable cause that Lambert had subjected the employees and other females to sexual harassment and to a hostile working environment in violation of Title VII of the Civil Rights Act of 1964.
On November 23, 1998, despite Kogut's pleas that he stay away, Lambert returned to the restaurant to resume the general management of the restaurant. After Lambert's return, Kogut continued his discussions with WSC management regarding how he might be able to salvage the situation and terminate Lambert's interest in the franchise. With Lambert back at the restaurant, sales began to fall, causing LRC to fall severely behind in its debt obligations. On May 17, 2000, LRC's mortgagee foreclosed on its franchise. On May 18, 2000, WSC terminated its franchise agreement with LRC, pursuant to section 11.2(b)(iii) of the franchise agreement, which allows WSC to terminate the agreement in the event of foreclosure by a creditor.
On April 21, 2000, Webb, Frye, Cassidy, Foley, Lipscomb, and Lassiter (case no. 1011210) (hereinafter referred to collectively as "Webb") sued WSC, asserting claims of negligent hiring, training, and supervision; assault; battery; invasion of privacy; intentional infliction of emotional distress; breach of contract; and fraud. They also sued Lambert and LRC, asserting similar claims. On June 2, 2000, Kennedy (case no. 1010804) and Pate (case no. 1010805) sued WSC, asserting claims of assault and battery; invasion of privacy; negligent or wanton hiring, supervision, and/or retention of employment; and the tort of outrage. Kennedy and Pate also sued Lambert and LRC on claims of assault and battery, invasion of privacy, and the tort of outrage. Webb, Kennedy, and Pate each amended their complaint to assert a direct-negligence claim against WSC. In all three cases, the trial court entered default judgments against Lambert and LRC.
On November 1, 2000, WSC moved for a summary judgment as to each claim brought against it by Kennedy and Pate, arguing that no agency relationship existed between Lambert and WSC, or, alternatively, that it never authorized or ratified Lambert's conduct and that the alleged acts were outside the scope of Lambert's employment. In support of each motion, WSC filed a statement of facts and a brief. In each action, WSC failed to state the basis for its summary-judgment motion on the direct-negligence claim in either its motion or brief.
On December 27, 2000, WSC moved for a summary judgment on each claim brought against it by Webb. The statement of facts and the brief it filed in support of that motion were identical to those it filed in the Kennedy and Pate cases. On September 10, 2001, WSC filed a supplemental argument in support of its motion for a summary judgment in Webb's case,2 arguing (1) that as to the direct-negligence claim it had no duty of care, and (2) that Webb failed to present substantial evidence creating a genuine issue of material fact as to the fraud and breach-of-contract claims. The trial court entered a summary judgment for WSC on all claims in each of the three cases.
Kennedy, Pate, and Webb argue that an agency relationship existed between WSC and LRC and between WSC and Lambert and, therefore, that WSC is vicariously liable for the intentional torts committed by Lambert in the scope of his employment and is liable for its negligent and/or wanton hiring, training, supervision, and retention of Lambert. In addition, Kennedy and Pate argue that WSC did not carry its initial burden in moving for a summary judgment on each of their direct-negligence claims and, therefore, that summary judgments on their direct-negligence claims were improper.
Kennedy, Pate, and Webb contend that an agency relationship was created between WSC, on the one hand, and LRC and Lambert, on the other, by WSC's retaining a right to control the operations at the Monroeville Western Sizzlin restaurant. They rely on the following provisions in the franchise agreement between WSC and LRC to support their proposition:
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