Zsigo v. Hurley Medical Center

• Decision Date: 14 June 2006
• Docket Number: COA No. 3.,Docket No. 126984.
• Citation: 475 Mich. 215,716 N.W.2d 220
• Parties: Marian T. ZSIGO, Plaintiff-Appellant, v. HURLEY MEDICAL CENTER, Defendant-Appellee.
• Court: Michigan Supreme Court

716 N.W.2d 220

475 Mich. 215

Marian T. ZSIGO, Plaintiff-Appellant, v. HURLEY MEDICAL CENTER, Defendant-Appellee.

Docket No. 126984.

COA No. 3.

Supreme Court of Michigan.

Argued November 8, 2005.

Decided June 14, 2006.

Law Office of Glen N. Lenhoff (by Glen N. Lenhoff and Robert Kent-Bryant), Flint, for the plaintiff.

Portnoy & Roth, P.C. (by Robert P. Roth and Marc S. Berlin), Bloomfield Hills, for the defendant.

WEAVER, J.

The general rule of respondeat superior is that an employer is not liable for the torts of its employees who act outside the scope of their employment.¹ This case raises the question whether this Court has adopted an exception to the respondeat superior rule of employer nonliability found in 1 Restatement Agency, 2d, § 219(2)(d). Under this exception, an employer would be liable for the torts of an employee acting outside the scope of his or her employment when the employee is "aided in accomplishing" the tort "by the existence of the agency relation."² We hold that this Court has not previously adopted this exception, and we decline to adopt it.

We affirm in part the decision of the Court of Appeals, but for different reasons reverse in part, and remand to the trial court for entry of a judgment of dismissal with prejudice.

FACTS

We adopt the facts as related by the Court of Appeals:

This case arises from plaintiff's allegation that defendant's employee, a nursing assistant, sexually assaulted her in the emergency room at Hurley Medical Center on July 9, 1998. On that date, plaintiff was suffering a manic depressive episode when she was brought to defendant's emergency department by police and placed in a treatment room. Because plaintiff was belligerent, yelling, swearing, and kicking, she was placed in restraints and administered treatment. Eventually she was left alone in the room with a nursing assistant assigned to clean the room. Plaintiff begged him to release her from the restraints.

While the aide was alone in the room with plaintiff, she continued to make sexually explicit remarks, enticing him to engage in sexual activity with her. According to plaintiff, she made these remarks "[a]t first to get him out of the room like the other nurses," but when he went to her, she "suddenly thought he was a very powerful person in the hospital" and "would release [her.]" The aide engaged, without resistance, in digital and oral sex with plaintiff, but he did not release her and left. One of the nurses came back into the room right after the aide left. Plaintiff did not say anything because she was scared.

Plaintiff reported the incident three days later to a social worker, police were notified, and an investigation commenced. Plaintiff believed the employee might have been a janitor because he was cleaning and she provided a general description of the employee. Through the hospital's efforts, the nursing assistant was identified approximately three months later.³

Plaintiff brought a complaint against defendant Hurley Medical Center, alleging assault, battery, and intentional infliction of emotional distress.⁴ The trial court denied summary disposition on these counts, finding that there was a question of fact with regard to whether Powell's agency relationship with defendant aided Powell in committing the tortious acts against plaintiff.

At the close of plaintiff's case, defendant moved for a directed verdict, asserting that defendant could not be liable for the torts of an employee acting outside the scope of his employment. Plaintiff, relying on this Court's opinion in Champion v. Nationwide Security, Inc.,⁵ argued that defendant was liable under the "aided by the agency" relationship exception to respondeat superior liability. The trial court denied defendant's motion. The jury rendered a verdict for plaintiff in the amount of $750,000 in past damages and $500,000 in future damages. After reducing the verdict to its present value, the trial court entered a judgment in favor of plaintiff in the amount of $1,147,247.42.

Defendant appealed, and the Court of Appeals, in an unpublished decision, reversed and remanded the case for entry of a judgment of dismissal, holding that the trial court erred in denying defendant's motions for summary disposition and a directed verdict because plaintiff failed to present a material question of fact regarding defendant's liability under the doctrine of respondeat superior.⁶ The Court of Appeals denied plaintiff's motion for reconsideration. Plaintiff sought leave to appeal, and we granted the application.⁷

STANDARD OF REVIEW

This Court reviews de novo a trial court's decision on a motion for summary disposition.⁸ Summary disposition may be granted pursuant to MCR 2.116(C)(10) when "[e]xcept as to the amount of damages, there is no genuine issue as to any material fact," and the moving party is entitled to judgment as a matter of law.⁹ When reviewing a motion for summary disposition, "a trial court considers affidavits, pleadings, depositions, admissions, and other evidence . . . in the light most favorable to the party opposing the motion."¹⁰

When reviewing a trial court's decision on a motion for a directed verdict, the standard of review is de novo and the reviewing court must consider the evidence in the light most favorable to the nonmoving party.¹¹

ANALYSIS

Under the doctrine of respondeat superior, the general rule is that an employer is not liable for the torts intentionally or recklessly committed by an employee when those torts are beyond the scope of the employer's business.¹² 1 Restatement Agency, 2d, § 219(2) sets forth the general rule of respondeat superior and also lists certain exceptions to employer nonliability:

(2) A master is not subject to liability for the torts of his servants acting outside the scope of their employment, unless:

(a) the master intended the conduct or the consequences, or

(b) the master was negligent or reckless, or

(c) the conduct violated a non-delegable duty of the master, or

(d) the servant purported to act or to speak on behalf of the principal and there was reliance upon apparent authority, or he was aided in accomplishing the tort by the existence of the agency relation.¹³

The question in this case is whether Michigan recognizes the fourth exception, § 219(2)(d), to the doctrine of respondeat superior nonliability. Plaintiff argues that Michigan has adopted, or should now adopt, the fourth exception to the respondeat superior nonliability rule. Section 219(2)(d) provides an exception to employer nonliability when a plaintiff can show that he or she relied on the apparent authority of the employee, or that the employee was aided in harming the plaintiff by the existence of the agency relationship between the employee and the employer. Section 219(2)(d) and the commentary on that section establish that this exception to employer nonliability applies primarily to cases involving misrepresentation and deceit, for example when a store manager is able to cheat store customers because of his or her position as store manager for the owner.¹⁴

Section 219(2)(d) was first mentioned by this Court in McCann v. Michigan,¹⁵ a case in which this Court issued four separate opinions, none of which received enough concurrences to constitute a majority opinion. A majority of this Court, however, declined to adopt the exception. Consequently, this Court did not adopt § 219(2)(d) in McCann.

Nevertheless, several appellate court decisions have cited the McCann plurality's reference to § 219(2)(d) in subsequent tort actions.¹⁶ After noting such multiple references, the Court of Appeals panel below concluded that the Michigan Supreme Court had adopted § 219(2)(d) in Champion, supra.

In Champion, supra, the plaintiff was raped by her supervisor and sought to impose liability on their employer for quid pro quo sexual harassment under the Michigan Civil Rights Act, MCL 37.2103(i). The employer attempted to avoid liability under the Civil Rights Act on the theory that the employer did not authorize the supervisor to rape his subordinate. Calling the employer's "construction of agency principles . . . far too narrow," the Court in Champion, supra at 712, 545 N.W.2d 596, cited Restatement Agency, 2d, § 219(2)(d) in a footnote.¹⁷ Champion did not elaborate on this citation in reaching this conclusion.

The reference to "Restatement Agency, 2d, § 219(2)(d)" in footnote six of Champion may have contributed to appellate court confusion about whether this Court adopted the aided by the agency exception to employer nonliability under the doctrine of respondeat superior.¹⁸ We now clarify that the reference to § 219(2)(d) in Champion, supra, was made only in passing and on the basis of the very distinct facts of that civil rights matter.¹⁹ We did not, by that reference, adopt § 219(2)(d). The Court of Appeals erred in finding that this Court affirmatively adopted the "aided by the agency relationship" exception to liability under the respondeat superior doctrine set forth in Restatement Agency, 2d, § 219(2). However, this case again presents us with the opportunity to adopt the exception.

In support of adopting § 219(2)(d), plaintiff cites a First Circuit Court of Appeals decision, Costos v. Coconut Island Corp.²⁰ In Costos, the plaintiff was a guest at an inn and had retired for the night to her room. The inn manager obtained a key to the plaintiff's room, entered without the plaintiff's knowledge, and raped her. In finding the employer of the manager vicariously liable under § 219(2)(d), the court focused on the fact that as an agent of the inn, the manager was entrusted with the key to the plaintiff's room and knowledge of where to find her. Specifically, the key was the "instrumentality" that provided the manager with the opportunity to accomplish the rape.

Costos has been sharply criticized, and appears to have been adopted by only two other federal courts.²¹ Indeed, Costos was later distinguished by the ...