Welsh Mfg., Div. of Textron, Inc. v. Pinkerton's, Inc.

• Decision Date: 09 March 1984
• Docket Number: No. 80-442-A,80-442-A
• Citation: 474 A.2d 436
• Parties: WELSH MANUFACTURING, DIVISION OF TEXTRON, INC. v. PINKERTON'S, INC. ppeal.
• Court: Rhode Island Supreme Court

Page 436

474 A.2d 436

44 A.L.R.4th 603

WELSH MANUFACTURING, DIVISION OF TEXTRON, INC. v. PINKERTON'S, INC.

No. 80-442-Appeal.

Supreme Court of Rhode Island.

March 9, 1984.

Kenneth P. Borden, Higgins, Cavanagh & Cooney, Providence, for plaintiff.

Raymond A. LaFazia, Gunning, LaFazia & Gnys, Inc., Providence, for defendant; Patricia Ryan Recupero, Providence, of counsel.

OPINION

KELLEHER, Justice.

This is an action for negligence wherein the plaintiff, Welsh Manufacturing (Welsh), brought suit against a security guard company, Pinkerton's, Inc. (Pinkerton's), for losses sustained as a result of three major thefts. Welsh claimed that Pinkerton's was negligent in the hiring, training, supervision, or assignment of a guard who was later found to have been a co-conspirator in connection with the Welsh thefts and that such negligence was the proximate cause of its losses. A Superior Court jury returned a verdict in favor of Welsh, judgment was rendered in accordance therewith, and Pinkerton's now appeals.

On appeal, Pinkerton's contends that there was insufficient evidence relative to each theory of liability to warrant their individual submission to the jury. Additionally, it challenges the propriety of the trial court's refusal to grant its motion for a new trial. We affirm the judgment of the Superior Court.

Pinkerton's is a long-established security service-corporation serving Rhode Island and neighboring areas of Massachusetts. It was engaged by Welsh for approximately thirty years to provide for the security of Welsh's manufacturing facility, which in 1973 was located in the Olneyville section of Providence. Welsh, a division of Textron, manufactured gold sunglass frames for the United States government. The Welsh complex consisted of two buildings, one across the street from the other. There were always sizable quantities of gold on the Welsh premises, and Pinkerton's agents were aware of this fact.

Under the contract between the parties, Pinkerton's assessed the security requirements of Welsh's premises and daily provided one uniformed and unarmed security officer therein for twenty-four hours. During the night shift, that is, approximately midnight to early morning, the guard was required to make periodic checks of all floors in the complex, registering his presence at designated locations. Between August 24, 1973, and October 7, 1973--a span of about forty-five days--three thefts at Welsh's facility resulted in losses of gold in excess of $200,000. All three thefts were carried out by the same persons. The first two incidents occurred while Pinkerton's employee, Donald Lawson (Lawson), was guarding Welsh's facility during the night shift. On both of these occasions, Lawson admitted the perpetrators of the thefts. At the time of the third theft, Lawson had quit working for Pinkerton's, but he testified later that he had provided vital information to parties who subsequently, on the Saturday evening of the 1973 Columbus Day weekend, broke into Welsh's plant, put a gun to the head of the Pinkerton guard on duty, handcuffed him to a nearby machine, and "cleaned out" Welsh's gold inventory, which had a value of close to $180,000.

Lawson was a twenty-one-year-old part-time employee who worked for Pinkerton's on weekends. During the time of the Welsh thefts he had been employed by Pinkerton's for less than six months. He was at this same time a member of the United States Navy. In July 1972 he had been transferred to Quonset Point Naval Air Station in North Kingstown, Rhode Island, and thereafter took up residence in a West Warwick apartment building. The jury heard Lawson's deposition, which revealed that after having made the acquaintance of the occupant of the adjoining apartment, one Anthony Fiore, a person with known criminal proclivity, Lawson had agreed to procure a security-guard position at Pinkerton's for the purpose of assisting the neighbor in stealing the valuable commodities stored on premises to which he might be assigned. In return, Lawson too would share in the fruits of such thefts. Accordingly, Lawson had applied to Pinkerton's in March 1973, and in alleged violation of what Welsh claimed at trial to be a duty to make a reasonable investigation, Pinkerton's hired him.

We consider briefly the principles of law involved in the action before us. In deciding this case, we align ourselves with the majority of jurisdictions that recognize the direct liability of an employer to third parties who are injured by acts of unfit, incompetent, or unsuitable employees. ¹ Illustrative of these are Ponticas v. K.M.S. Investments, 331 N.W.2d 907 (Minn.1983), and C.K. Security Systems, Inc. v. Hartford Accident & Indemnity Co., 137 Ga.App. 159, 223 S.E.2d 453 (1976). In Ponticas, a tenant who was sexually assaulted by the manager of her apartment complex brought suit against the owner of the complex. The tenant alleged that the owner was negligent in hiring the manager, who had a criminal record. On his application for the position, the manager had provided the names of two references, one without an address, the other without a phone number. When asked if he had ever been convicted of any crimes, he entered "traffic tickets." The owner of the complex did not investigate further. It was adduced at trial that, in fact, the two references were his mother and his sister and at the time of his application he was on parole following a conviction in California for burglary and receiving stolen goods. Ponticas, 331 N.W.2d at 909-10. The court stated that an employer has the duty to exercise ordinary care in hiring persons who, because of the nature of the employment, could present a threat of injury to members of the public. Id. at 911. The court further stated that the scope of an employer's preselection investigation is related to the degree of risk a potential employee poses to the third party but imposed no duty upon the employer to inquire into an applicant's criminal record. The Ponticas court found, however, that because the employment involved the manager's access to the apartment by use of a passkey, the scope of the owner's preselection investigation was not commensurate with the risks involved. Id. at 913.

In C.K. Security Systems, Inc. v. Hartford Accident & Indemnity Co., 137 Ga.App. 159, 223 S.E.2d 453 (1976), a guard who had been furnished by a security company to a landlord pursuant to a contract entered the office of one of the landlord's tenants and stole a blank check. He made the check payable to himself for an amount representing a six to seven thousand dollar overdraft, forged the tenant's signature, and deposited the check in the guard's own account in another bank. The tenant's bank authorized payment, having failed to check the signature. The bank and its insurer brought an action against the security company and its employee, claiming that the company had negligently hired its guard. In support of its motion for summary judgment, the guard's employer offered an affidavit showing the following: the guard had passed a personnel test with a high grade; he had been granted a permit to serve as a guard by the local police department; the security company had contacted the guard's prior employers; the guard had passed a criminology course. There was evidence that the police department in granting its permits only inquired into felony convictions. The court, in affirming the trial justice's denial of the motion, held that the evidence did not demand a finding that the company had exercised ordinary care in its selection of the guard. Id. at 159-63, 223 S.E.2d at 454-56. The court stated:

"The defendant was offering a security service and the use of its employees to patrol the premises for the purpose of protecting persons and property. In the selection of its employees it may have been duty bound to exercise a greater amount of care to ascertain its employees were honest and were not likely to commit thefts, where one employing others to perform a different type of service may meet the standard of care required with a lesser amount or quantum of care." Id. at 161-62, 223 S.E.2d at 455.

The action before us is distinguishable from that which arises under the doctrine of "respondeat superior" where the wrongful conduct of the employee is attributable to the master vicariously. Indeed, an action for negligent hiring provides a remedy to injured third parties who would otherwise be foreclosed from recovery under the master-servant doctrine since the wrongful acts of employees in these cases are likely to be outside the scope of employment or not in furtherance of the master's business. See Di Cosala v. Kay, 91 N.J. 159, 173, 450 A.2d 508, 515 (1982).

In Di Cosala the Supreme Court of New Jersey expressed this distinction aptly:

"The tort of negligent hiring or failure to fire addresses a different wrong from that sought to be redressed by the respondeat superior doctrine. One court has stated that:

'One dealing with the public is bound to use reasonable care to select employees competent and fit for the work assigned to them and to refrain from retaining the services of an unfit employee. When an employer neglects this duty and as a result injury is occasioned to a third person, the employer may be liable even though the injury was brought about by the wilfull act of the employee beyond the scope of his employment. [Fleming v. Bronfin, 80 A.2d 915, 917 (D.C.Mun.App.1951) ].'

"Thus, the tort of negligent hiring addresses the risk created by exposing members of the public to a potentially dangerous [or dishonest] individual, while the doctrine of respondeat superior is based on the theory that the employee is the agent or is acting for the employer. Therefore the scope of employment limitation on liability which is a part of the respondeat superior doctrine is not implicit in the wrong of negligent hiring." Id. 91 N.J. at 172-73, 450 A.2d at 515.

Our recognition of direct employer...