Rabon v. Guardsmark, Inc.

• Decision Date: 16 February 1978
• Docket Number: No. 76-2398,76-2398
• Parties: Lola RABON, Appellee, v. GUARDSMARK, INC., Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1277

571 F.2d 1277

Lola RABON, Appellee, v. GUARDSMARK, INC., Appellant.

No. 76-2398.

United States Court of Appeals, Fourth Circuit.

Argued Nov. 9, 1977.

Decided Feb. 16, 1978.

Stephen G. Morrison, Columbia, S. C. (John U. Bell, III, Nelson, Mullins, Grier & Scarborough, Columbia, S. C., on brief), for appellant.

Dallas D. Ball, Columbia, S. C. (Hammond A. Beale, Columbia, S. C., on brief), for appellee.

Before WINTER, RUSSELL and HALL, Circuit Judges.

WINTER, Circuit Judge:

In this diversity action, plaintiff, an employee of the Hewitt-Robins Division of Litton Industries, sued Guardsmark, Inc. (Guardsmark), a corporation engaged in the private security business, for damages resulting from a sexual assault upon her by one of its guards while she was working at a building that Guardsmark had been employed to protect. The district court granted summary judgment as to liability, and awarded plaintiff $300,000, the amount that the parties agreed were her monetary damages. Guardsmark appeals, and we reverse.

I.

The incident out of which this litigation arose occurred on Sunday, January 19, 1975. The facts relating to liability were stipulated: On that date, Melvin Thomas Roberts was employed by Guardsmark as a security guard and he was assigned to the Hewitt-Robins plant to provide protection for the plant and its employees. He was armed with a loaded .38 caliber pistol for which he was duly licensed by the South Carolina Law Enforcement Division pursuant to his employment as a security guard by Guardsmark.

Plaintiff, a payroll clerk, was working that night together with her supervisor, the general accounting manager at Hewitt-Robins. When the two were leaving the building at the conclusion of their duties, plaintiff discovered that she had left her automobile keys behind and she returned to get them. The supervisor, however, left, so that when plaintiff returned, she and Roberts were the only persons in the building. Roberts forcibly assaulted and raped the plaintiff at gunpoint. Plaintiff claims that the assault rendered her unable to continue her employment and caused her other grievous physical and psychological injuries. She has recovered the Workmen's Compensation benefits fixed by South Carolina law.

Faithful to the precepts of Erie Railroad v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), the district court looked to the law of South Carolina to determine if Guardsmark was liable to plaintiff. It held that the facts of the case did not bring it within the doctrine of respondeat superior, but it concluded, under the law of South Carolina, that a security guard company such as Guardsmark would be held to the higher standard of care which South Carolina law imposed on common carriers. This standard of care was clearly breached, in the opinion of the district court, by the assault upon the plaintiff. The district court's prediction that South Carolina law would treat security guard companies the same as common carriers was based largely upon the extensive statutory regulation of private security companies contained in the South Carolina Private Detective and Private Security Agencies Act, S.C.Code § 56-646.1 et seq. (1975 Cum.Supp.).

II.

The parties agree, as did the district court and as do we, that under the doctrine of respondeat superior, as traditionally applied in South Carolina, Guardsmark was not liable for Roberts' intentional tort. Lane v. Modern Music, Inc., 244 S.C. 299, 136 S.E.2d 713 (1964); Adams v. South Carolina Power Co., 200 S.C. 438, 21 S.E.2d 17 (1942); Courtney v. American Ry. Express Co., 120 S.C. 511, 113 S.E. 332 (1922). The assault by Roberts was manifestly not in furtherance of Guardsmark's business; it was the converse of Guardsmark's purpose that of providing protection and that for which it was employed. The assault was to effect Roberts' independent purpose, and it was not within the scope of his employment. The mere fact that the tort was committed at a time that Roberts should have been about Guardsmark's business and that it occurred at the place where Roberts was directed to perform Guardsmark's business does not alter these conclusions. Davenport v. Charleston Western Carolina Ry. Co., 72 S.C. 205, 51 S.E. 677 (1905).

The basis on which the district court found liability, ¹ the correctness of which plaintiff urges on appeal, is that South Carolina, as it has done in cases involving common carriers, would hold Guardsmark responsible for an intentional tort of its employee, at least when the tort was committed at the place where Guardsmark directed Roberts to carry out its business and the tort was committed by use of the gun which Guardsmark supplied to enable Roberts to carry out its business. The view of the case taken by the district court is not unknown to the law. The principle it apparently invoked is set forth in Restatement (Second) of Agency § 214 (1958), where it is said:

Failure of Principal to Perform Non-delegable Duty

A master or other principal who is under a duty to provide protection for or to have care used to protect others or their property and who confides the performance of such duty to a servant or other person is subject to liability to such others for harm caused to them by the failure of such agent to perform the duty. ²

The fact that the view of the law taken by the district court is in the mainstream is only the beginning of the case, not its solution. Under Erie, our function in this diversity case is to determine how the case would be decided under the law of South Carolina, not how it might be decided under the law of another, albeit equally respected, jurisdiction, nor under our independent views of the merits of the controversy. Thus our inquiry is directed to South Carolina's recognition of the principle of non-delegable duties, whether South Carolina has recognized a non-delegable duty of due care on the part of a private security guard enterprise and, if not, what is our informed prediction as to whether South Carolina would recognize a non-delegable duty of due care on the part of persons engaged in such an activity.

III.

South Carolina has recognized the non-delegable duty exception to the general rule of respondeat superior in a number of cases. Jones v. Atlantic Coast Line R.R., 108 S.C. 217, 94 S.E. 490 (1917); Buchanan v. Western Union Telegraph Co., 115 S.C. 433, 106 S.E. 159 (1920); Matheson v. American Telephone & Telegraph Co., 137 S.C. 227, 135 S.E. 306 (1926). A precise understanding of the rationale of these cases is not free from doubt because the basis of decision of each is not clearly articulated. Nevertheless, we note that the defendant in each was a common carrier ³ and was therefore subject to a stringent standard of care toward those with whom it dealt. ⁴ Indeed, the rule in South Carolina, as in other jurisdictions, is that a common carrier owes its patrons the highest degree of care. See, e. g., Poliakoff v. Shelton, 193 S.C. 398, 8 S.E.2d 494 (1940). Plaintiff argues that the principle supporting the imposition of this higher standard of care upon common carriers also applies to this case. But our examination of the South Carolina cases involving common carrier liability indicates that while the standard of liability is settled, the reasons for its adoption are not clear. ⁵ As a consequence, we lack a reasoned basis on which to conclude that the South Carolina Supreme Court would be persuaded to extend it to private security agencies.

We cannot agree with the district court that the South Carolina Private Detective and Private Securities Agencies Act, S.C.Code § 56-646.1 et seq. (1975 Cum.Supp.), places Guardsmark in the same category as a common carrier with respect to liability to the public for unauthorized acts of its servants. That statute merely establishes a licensing scheme. It addresses the manner of applying for a license, bonds, fees, registration of employees, firearms permits, the police powers of licensees, and the suspension or revocation of license. The civil liability of private security agencies is not mentioned.

True, the fact that the South Carolina legislature thinks it desirable to license private security agencies indicates a recognition that their activities affect the public interest. But one cannot infer from that recognition an intention to impose on them a higher standard of civil liability than that to which ordinary business enterprises are held. It is equally plausible to suppose that the legislature considered the licensing scheme an adequate safeguard for the public interest. Thus, this regulatory scheme does not evidence the legislative intention that the district court ascribed to it.

Our conclusion that the mere existence of the statute does not justify the extension of the common carrier standard of care to private security agencies is supported by the decision in Apex Smelting Co. v. Burns, 175 F.2d 978 (7 Cir. 1949), which exonerated a detective agency from liability for arson perpetrated by one of its guards, although its business was subject to licensing and regulation. When the licensing act was amended to impose liability on the detective agency-employer for the "good conduct" of its employees, the opposite result was reached when a security guard set a fire. Stewart Warner Corp. v. Burns International Security Services, Inc., 353 F.Supp. 1387 (N.D.Ill.1973).

IV.

A substantial factor in our decision is the usual deference on the part of the Supreme Court of South Carolina to the South Carolina legislature in matters involving a change in the common law. Plaintiff's right to recovery may be sustained only by extending the exception to the traditional rule of respondeat superior that a principal is not liable for his servant's unauthorized intentional tort in derogation of the common law. But the South Carolina courts have been reluctant to expand tort liability. The Supreme Court of South Carolina has twice declined to abolish...