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Does Employer’s Admission of Vicarious Liability for Actions of Employee Insulate the Employer from Other Causes of Action?

Posted on Oct 22 2016 1:56PM by Attorney, Jason A. Lee

The Tennessee Court of Appeals recently dealt with an issue that has not been previously discussed by Tennessee Appellate courts in Melanie Jones, Individually and on behalf of Matthew H. V. Shavonna Rachelle Windham, et al., No. W2015-00973-COA-R10-CV, 2016 WL 943722 (Tenn. Ct. App. 2016).  The question deal with the situation where an employer and employee are both sued due to the actions of the employee in causing an automobile accident (while working for the employer).  The employer, in the Answer to Complaint, admitted they were vicariously liable for the actions of the employee.  The question, therefore, was whether the plaintiff could still proceed with other claims against the employer including negligent hiring, negligent retention and negligence per se for their own independent negligent actions when they had already admitted vicarious liability for the actual accident.    

 

For some reason, the plaintiff wanted to pursue various individual cause of actions directly against the employer in this case.  Perhaps they thought it would increase the damages because the employer took actions that were inappropriate.  Interestingly, many other state courts have decided this issue and they are basically evenly split on how to handle this situation.  Thus, the Tennessee Court of Appeals went into a detailed assessment of the various positives and negatives of both avenues.  The Court ultimately held that the “an employer’s admission of vicarious liability does not bar a plaintiff from proceeding against the employer on independent claims of negligence.” Jones at 5. 

 

The Court admitted that this holding does make it necessary for trial courts to potentially guard juries from being prejudice by evidence against the employer after vicarious liability is already admitted.  As a result, the Court discussed in detail the possibility of trying to avoid that prejudice by using jury instructions or ultimately by bifurcating the proceedings under Tennessee Rule of Civil Procedure 42.02.   This rule provides as follows: 

 

The court for convenience or to avoid prejudice may in jury trials order a separate trial of any one or more claims, cross-claims, counterclaims, or third-party claims, or issues on which a jury trial has been waived by all parties. For the same purposes the court may, in nonjury trials, order a separate trial of any one or more claims, cross-claims, counterclaims, third-party claims, or issues.

 

The court provided specific instructions on the bifurcation process in this context which may be beneficial if you are dealing with this particular issue.  The Court stated:

 

A few points deserve mentioning if a trial court chooses to bifurcate the proceedings out of a concern of prejudice. First, it is advisable that the trial court permit the jury to assess damages at the end of the first phase of trial. A plaintiff's compensatory damages are fixed, and they neither increase nor decrease by maintaining the additional negligence claim against the employer. By permitting an assessment of damages at the end of the first phase of trial, the trial court would alleviate any concern that the plaintiff's independent negligence claim somehow fostered a duplicative recovery. Second, the jury's allocation of fault should not occur until the end of the second phase of trial. Only at that point will all alleged fault have been considered by the jury, thereby allowing the jury to properly weigh the relative fault of all actors. In the event a plaintiff's independent negligence claims against the employer are also used to support a valid punitive damages claim, we note that the second phase of trial will require additional bifurcation. See Hodges v. S.C. Toof & Co., 833 S.W.2d 896, 901 (Tenn.1992) (holding that liability for punitive damages must first be established in a separate proceeding before the amount of punitive damages can be determined).

 

 

Jones at 8.  At the end of the day, this case is important because the Court held, for the first time in Tennessee, that the fact an employer admits vicarious responsibility for the actions of its employee, does not eliminate or preempt the ability of plaintiff to bring independent causes of action against the employer for their own acts of negligence.  It will be interesting to see if people use this strategically to paint the employer in a bad light if the facts warrant.


AUTHOR IMPORTANT NOTE- It has come to my attention that the TN Supreme Court Reversed this decision because the appeal was "improvidently granted".  They did not reverse on the merits but it was a procedural dismissal of the appeal.  I think citation to this case as persuasive authority can still be done with proper explanation of the procedural posture of the case. The Tennessee Supreme Court order can be found here:

 

Follow me on Twitter at @jasonalee for updates from the Tennessee Defense Litigation blog.

TAGS: Torts, Employment Law, Civil Procedure
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Jason A. Lee is a Member of Burrow Lee, PLLC. He practices in all areas of defense litigation inside and outside of Tennessee.

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