Fahrendorff Ex Rel. Fahrendorff v. North Homes, Inc.

597 N.W.2d 905, 1999 Minn. LEXIS 516, 1999 WL 570971

• Court: Supreme Court of Minnesota
• Decided: August 5, 1999
• Docket: C0-98-129
• Status: Published

Opinions

OPINION

GILBERT, Justice.

This is an appeal from a court of appeals decision affirming summary judgment in favor of respondent. We must determine whether there exist any genuine issues of material fact or errors in the application of the law with respect to appellant’s claim that the sexual assault committed by an employee of respondent fell within the scope of his employment. When viewed in the light most favorable to the appellant, the evidence suggests that the source of the assault was related to the employment duties of the assailant-employee. Accordingly, we reverse and remand for trial.

Respondent North Homes, Inc. is a nonprofit corporation that owns and operates the I.T.A.S.K.I.N. House, a temporary crisis shelter, i.e., group home. I.T.A.S.K.I.N. House is licensed by the Minnesota Department of Corrections and the Minnesota Department of Human Services to provide 24-hour residential care for up to seven persons under the age of 18. On April 10, 1995, Michelle Fahren-dorff, then 15 years old, was placed in I.T.A.S.K.I.N. House on a 72-hour hold after she reported an argument she had with her parents to the Aitkin County Sheriffs Department. See Minn.Stat. § 260.165, subd. 1(c)(2) (1998). After a hearing on April 13, 1995, Fahrendorffs stay was extended to April 18. See Minn. Stat. § 260.172, subd. 1 (1998). While at I.T.A.S.K.I.N. House, Fahrendorff was sexually assaulted by David Kist, a program counselor at the home. Her claims against North Homes stem from that assault.

Kist was hired as a program counselor at I.T.A.S.K.I.N. House in December 1993. North Homes conducted a criminal background check as required by the Department of Human Services. See Minn.Stat. § 245A.04, subd. 3 (1998); Minn. R. 9543.0040, subp. 3 (1997). These checks revealed that Kist had no criminal history. North Homes also contacted several of Kist’s former employers and personal references, none of whom gave any indication that Kist was unfit for the program counselor position.

Program counselors at I.T.A.S.K.I.N. House fulfilled the role of “group home parents” as defined in Minn. R. 9545.1420, subp. 4 (1997). According to North Homes’ policy manual, counselors were responsible “for the management, supervision and attention of youth placed in the shelter’s care” and were to help “provide a safe and secure environment for shelter residents.” Counselors working the mid-night shift were required to perform multiple “bed checks” of residents each night and had complete access to the residents’ bedrooms for that purpose. Counselors, however, were instructed to avoid physical contact with residents whenever possible to prevent questions of inappropriate contact. North Homes also instructed counselors to avoid relationships that “might increase risk of client/resident exploitation in any form,” and counselors were required to report any physical or sexual abuse of residents.

At Kist’s six-month review, his supervisor rated Kist’s performance as “satisfactory.” In the summer and fall of 1994, however, two complaints were lodged against Kist alleging improper conduct toward female residents. North Homes spoke to Kist about the incidents and noted them in Kist’s personnel file, but determined that no disciplinary action was necessary.

On April 15, 1995, Kist was scheduled to work the midnight to 8:00 a.m. shift at I.T.A.S.K.I.N. House. At that time, Fah-rendorff and two juvenile males were the only residents of I.T.A.S.K.I.N. House. Consistent with I.T.A.S.K.I.N. House’s policy of maintaining a ratio of one counselor for every four residents, Kist was the only program counselor on duty that morning.

Shortly after he came on duty, Kist let an unauthorized male Mend into I.T.A.S.K.I.N. House. The two began drinking beer and making a lot of noise. Eventually, Fahrendorff, who had gone to bed, went upstairs to where Kist and his friend were and asked the men to be quiet so she could sleep. Fahrendorff then returned to her room. Kist later went to Fahrendorffs bedroom, offered her a cigarette, and asked her not to say anything about his behavior. He told her that he would shut off the smoke alarms so that she could smoke the cigarette. Fahren-dorff accepted the cigarette, went to the bathroom to smoke it, and then returned to bed.

Either shortly after Fahrendorff first asked Kist and his friend to be quiet or shortly after Kist gave Fahrendorff the cigarette, Kist’s friend left. At that point, Kist was the only employee and the only adult in I.T.A.S.K.I.N. House. Fahren-dorff was alone in her room and the two juvenile male residents were upstairs in a separate bedroom.

Sometime during the early morning hours of April 15, Kist returned to Fahren-dorffs room carrying two cans of beer. Kist offered one of the beers to Fahren-dorff who accepted it. Kist then sat on Fahrendorffs bed and began talking with her. He told Fahrendorff that he would help her to get released from I.T.A.S.K.I.N. House, that he could help her get emancipated from her parents, and that he would take care of her. Eventually the nature of the conversation changed and Kist began telling Fahrendorff that she was “pretty” and “hard to resist.” Kist then kissed Fahrendorff and began making other sexual advances towards her.

Kist left Fahrendorffs room several times thereafter to answer the house phone but each time returned and continued to make sexual advances towards Fah-rendorff. Fahrendorff tried to refuse Kist’s advances and at one point went upstairs to the room of the two juvenile male residents for help, but the male residents refused to let her stay in their room. Over the course of his shift, Kist repeatedly kissed Fahrendorff, touched her breasts with his hands and mouth, and touched her genitals over her clothes. In I.T.A.S.K.I.N. House’s daily shift log, however, Kist reported that Fahrendorff had “slept all night.”

Fahrendorff did not report the incident to the female counselor who was on duty from 8:00 a.m. to 4:00 p.m. on April 15. Kist again came on duty at approximately 4:00 p.m. According to Fahrendorffs original statement to the police, Kist asked her several times during this shift if he could “hold” her again that evening but there was no further sexual contact. In a subsequent deposition, however, Fahrendorff said that Kist kissed her on her cheek on the evening of April 15.

On April 16, 1995, Easter Sunday, Fah-rendorff was permitted to leave I.T.A.S.K.I.N. House to have dinner with her family. She told her family about Kist’s actions and her parents took her to the Itasca County Sheriffs Department where Fahrendorff reported the incident. Kist was immediately suspended from duty. North Homes and the sheriffs department investigated the incident. North Homes terminated Kist on May 26, 1995. Kist subsequently pled guilty to charges of introducing contraband into a correctional facility in violation of Minn.Stat. § 641.165, subd. 2(a) (1998), and second-degree criminal sexual conduct in violation of Minn. Stat. § 609.343, subds. 1(b), 2 (1998).

On December 30, 1996, Fahrendorff served a civil complaint against North Homes. In the complaint, Fahrendorff alleged that North Homes was liable for assault and battery, sexual abuse, and infliction of emotional distress under doctrines of respondeat superior and aiding and abetting. Fahrendorff also asserted a general claim of negligence and claims of negligent supervision, training, retention, and hiring.

North Homes moved for summary judgment on all counts. In response, Fahren-dorff submitted an affidavit from John Krueger, the director of the St. Cloud Children’s Home and a licensed psychologist and social worker, who had worked in the area of juvenile residential care since 1974. Among the statements set forth in Krueger’s affidavit was his conclusion that, “inappropriate sexual contact or abuse of power in these situations, although infrequent, is a well known hazard in this field.”

The trial court granted summary judgment in favor of North Homes, concluding that Fahrendorff had failed to raise any issue of material fact with respect to any of her claims and that North Homes was entitled to judgment as a matter of law. With respect to Fahrendorff s respondeat superior claim, the court concluded that “[t]he sexual contact was for Kist’s personal sexual gratification and was not in furtherance of his employment duties.” Thus, the court concluded Kist was not acting within the scope of his employment when he committed the assault, and North Homes could not be held liable for Kist’s acts. The court also ruled that Krueger’s affidavit was insufficient to create a factual question as to whether Kist’s abuse was foreseeable by North Homes because it “state[d] no opinion on whether it was foreseeable that David Kist would commit an act of sexual abuse.”

The Minnesota Court of Appeals affirmed the summary judgment order of the trial court. With respect to Fahren-dorffs respondeat superior claims, the court concluded that “Kist’s actions were criminal and conducted purely for his own personal gratification” and thus fell outside the scope of his employment. Like the trial court, the court of appeals determined that Krueger’s affidavit was insufficient to create a material question of fact on the issue of whether Kist’s abuse was foreseeable.

On appeal to this court, Fahren-dorff makes two arguments. First, she asserts that the evidence was sufficient to raise a material question of fact with respect to the elements of her respondeat superior claim. Second, she argues that, as a matter of public policy, group homes should be held strictly liable for the sexual assault of a minor resident by its employee. Fahrendorff, however, did not raise the issue of strict liability in her pleadings. As a general rule, we will not consider an issue raised for the first time on appeal. See Steenberg Constr. Co. v. Rohr, 296 Minn. 512, 513, 207 N.W.2d 722, 723 (1973). We therefore decline to address the strict liability issue and limit our analysis to Fahrendorffs respondeat superior claim.

“[Sjummary judgment is appropriate where the ‘pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact’ and either party is entitled to judgment ‘as a matter of law.’ ” W.J.L. v. Bugge, 573 N.W.2d 677, 680 (Minn.1998) (quoting Minn. R. Civ. P. 56.03). On appeal from a grant of summary judgment, the reviewing court is to determine whether genuine issues of material fact exist and whether the trial court erred in its application of the law. See State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). We must consider the evidence in the light most favorable to the party against whom summary judgment was granted. See Lubbers v. Anderson, 539 N.W.2d 398, 401 (Minn.1995).

Under the “well-established principle” of respondeat superior, “an employer is vicariously liable for the torts of an employee committed within the course and scope of employment.” Schneider v. Buckman, 433 N.W.2d 98, 101 (Minn.1988). Such liability stems not from any fault of the employer, but from a public policy determination that liability for acts committed within the scope of employment should be allocated to the employer as a cost of engaging in that business. See Lange v. National Biscuit Co., 297 Minn. 399, 403, 211 N.W.2d 783, 785 (1973). As we have interpreted the doctrine in Minnesota, an employer may be held liable for even the intentional misconduct of its employees when (1) “the source of the attack is related to the duties of the employee,” and (2) “the assault occurs within work-related limits of time and place.” Id. at 404, 211 N.W.2d at 786.

In the present case, neither party disputes that Kist’s sexual assault of Fah-rendorff occurred within work-related limits of time and place. Thus, we focus our analysis on whether the source of Kist’s assault was related to the duties of his employment.

Both of the lower courts determined that because Kist’s acts were prohibited, illegal, and performed for personal gratification, they were not within the scope of his employment. In Lange, however, we held that an employee’s act need not be committed in furtherance of his employer’s business to fall within the scope of his employment. See id. at 404, 211 N.W.2d at 786. Instead, we recognized that:

[t]he master is liable for any such act of the servant which, if isolated, would not be imputable to the master, but which is so connected with and immediately grows out of another act of the servant imputable to the master, that both acts are treated as one indivisible tort.

Id. at 404, 211 N.W.2d at 785-86 (quoting Gulf, C. & S.F. Ry. v. Cobb., 45 S.W.2d 323, 326 (Tex.Civ.App.1931)). We reaffirmed that holding in Marston v. Minneapolis Clinic of Psychiatry and Neurology, 329 N.W.2d 306 (Minn.1982), where we held that “the employee’s motivation should not be a consideration for imposition of vicarious liability.” Id. at 311.

Marston concerned the liability of a clinic-employer for the damages caused by a psychologist-employee who had engaged in sexual misconduct with several patients at the clinic during and immediately after therapy. See id. at 308. In summarizing the evidence, we noted that “sexual contact or relationship with a patient [was] absolutely forbidden” by the clinic. Id. Moreover, “there was uncontradicted testimony that any sexual contact or relationship with a patient is totally unethical, of no therapeutic purpose, purely personal and strictly proscribed by the Code of Ethics of the American Psychological Association.” Id. Still, we held the evidence was sufficient to raise a question of material fact as to whether the psychiatrist’s conduct fell within the scope of his employment. See id. at 311. In so holding, we noted that the sexual misconduct would not have occurred but for the psychiatrist’s employment, occurred during or after regular therapy sessions, and was preceded by normal therapeutic massage. See id. We also noted that there was “testimony that sexual relations between a psychologist and a patient is a well-known hazard and thus, to a degree, foreseeable and a risk of employment.” Id. Because of this evidence, we held that “it should be a question of fact whether the acts of [the psychologist] were foreseeable, related to and connected with acts otherwise within the scope of employment.” Id.

We again addressed the issue of an employer’s liability for the sexual misconduct of an employee in P.L. v. Aubert, 545 N.W.2d 666 (Minn.1996). Aubert concerned the liability of a school district for the misconduct of a teacher who had sexual relations with a minor student on the school premises and, at times, during class hours. See id. at 667. Looking at the evidence presented, we held that no factual question existed as to whether the teacher’s acts fell within the scope of her employment and affirmed summary judgment in favor of the school. See id. at 668. We distinguished Marston, on grounds of foreseeability:

It was the foreseeability of the risk that determined the outcome of the Marston case.

Here we find no evidence that such relationships between teacher and student are a “well-known hazard”; thus foreseeability is absent. While it is true that teachers have power and authority over students, no expert testimony or affidavits were presented regarding the potential for abuse of such power in these situations; thus there can be no implied foreseeability.

Id. 1

Examining the evidence in the light most favorable to Fahrendorff, we conclude that a reasonable jury could find that the source of Kist’s assault was related to the duties of his employment. Although Kist’s sexual assault of Fahrendorff was criminal and personally motivated, the lower courts erred in relying on those factors to grant North Homes’ motion for summary judgment. As we held in Marston, just because an employee’s ultimate actions may be motivated by personal gratification and prohibited by the employer does not mean that those actions fall outside the scope of employment as a matter of law. See 329 N.W.2d at 311. Rather, it is a question of fact whether the employee’s acts were foreseeable, related to, and connected with acts otherwise within the scope of his employment. Id.

Like the employee in Marston, Kist’s assault would not have occurred but for his employment. As a program counselor, Kist fulfilled the role of a “group home parent” to Fahrendorff. See Minn. R. 9545.1420, subd. 4. In that position, Kist held significant power and authority over Fahrendorff. Kist’s job enabled him to be alone with Fahrendorff, to have unfettered access to her bedroom, and to conceal, at least for a short time, his criminal conduct. The record contains evidence that Kist used this authority on two successive nights to enter Fahrendorffs room and have sexual contact with her.

The record also indicates that Kist initiated his advances toward Fahrendorff by talking to her about her situation with her parents and telling her he could help her get out of the group home. Such conversation related directly to the reason Fah-rendorff was at I.T.A.S.K.I.N. House. Therefore, the source of East’s attack lay in activity that was directly related to his legitimate counselor duties. Thus, as in Marston, there is evidence that Kist’s assault, although wrong and illegal, was connected with or related to seemingly legitimate employment activities.

Additionally, viewed in the light most favorable to Fahrendorff, the evidence raises a factual question as to the foreseeability of sexual abuse in group homes. In response to North Homes’ motion for summary judgment, Fahrendorff submitted the affidavit from Krueger, a purported expert in the group home industry, expressly stating that “inappropriate sexual contact or abuse of power in [group home] situations, although infrequent, is a well known hazard in this field.” (emphasis added). This sworn statement, although somewhat conclusory and lacking specific examples, is nearly identical to the testimony we relied on in Marston in holding that a question of material fact existed on the issue of foreseeability. See 329 N.W.2d at 311. Moreover, this affidavit is the exact type of evidence of foreseeability we found to be lacking in Aubert. See 545 N.W.2d at 668.

An affidavit supporting a motion in opposition to summary judgment must “be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.” Minn. R. Civ. P. 56.05. In the past, we have found affidavits to be insufficient to raise a question of material fact if they merely stated legal or factual conclusions without providing a basis for the affiants’ knowledge and without making any showing that the affiants were competent to testily as to the matters stated. See Federal Ins. Co. v. Pratt’s Express, 308 Minn. 282, 283-84, 241 N.W.2d 488, 489 (1976); Peterson v. American Family Mut. Ins. Co., 280 Minn. 482, 487, 160 N.W.2d 541, 544-45 (1968).

Here, Krueger’s affidavit indicates that the claims made therein are the product of personal knowledge gained during 23 years of employment and management in group homes. Given these credentials, Krueger appears competent to testify as an expert on the issues and concerns facing the group home industry. Because Krueger’s claims are the product of personal knowledge and Krueger would be qualified to make the same claims in front of a jury, his affidavit is sufficient to raise a question of fact on the foreseeability of sexual abuse in the group home industry.

We concede that Krueger’s affidavit does not contain information specific to Kist or I.T.A.S.K.I.N. House.² Such information, however, is not necessary to establish foreseeability in respondeat superior cases. Contrary to liability based on negligence, liability based on respondeat superior stems from public policy rather than from any fault of the employer. See Lange, 297 Minn, at 403, 211 N.W.2d at 785. If we were to predicate liability in respondeat superior cases upon a showing that the employer should have reasonably anticipated the employee’s specific misconduct, this distinction would be lost. Accordingly, other jurisdictions that, like us, use foreseeability as a consideration in determining respondeat superior liability, have distinguished the degree of foreseeability required in the respondeat superior context from that required in direct negligence cases:

“foreseeability” in this context must be distinguished from “foreseeability” as a test for negligence. In the latter sense “foreseeable” means a level of probability which would lead a prudent person to take effective precautions whereas “foreseeability” as a test for respondeat superior merely means that in the context of the particular enterprise an employee’s conduct is not so unusual or startling that it would seem unfair to include the loss resulting from it among other costs of the employer’s business.

Rodgers v. Kemper Constr. Co., 50 Cal.App.3d 608, 124 Cal.Rptr. 143, 148-49 (Ct.App.1975).

Here Krueger’s affidavit stated that sexual abuse by group home parents, although infrequent, is a “well known hazard” in the group home industry. This sworn statement suggests that sexual abuse by a group home parent is sufficiently common in the group home industry that, as a matter of fairness, an employer engaged in that business should bear the loss associated with such abuse as a foreseeable cost of doing business. Thus, as we recognized in Marston, testimony such as Krueger’s does create a genuine issue of fact as to whether an employee’s tort is foreseeable. See 329 N.W.2d at 311.

While the above evidence is not conclusive proof that Kist’s acts were within the scope of his employment, we hold, as we did in Marston, that the evidence does raise a question of fact as to whether Kist’s wrongful acts were foreseeable, related to and connected with acts otherwise within the scope of employment. Accordingly, we reverse the decision of the court of appeals on this issue and remand the case for trial.

Reversed and remanded.

LANCASTER, J., took no part in the consideration or decision of this case.

1 . Our decision in Aubert was based solely on the lack of evidence presented in that case showing that sexual assaults of students by teachers were a "well-known hazard.” We note that subsequent to our decision in Au-bert, the United States Supreme Court stated in a Tille IX case that “[t]he number of re-porled cases involving sexual harassment of students in schools confirms that harassment unfortunately is an all too common aspect of the educational experience." Gebser v. Lago Vista Indep. Sch. Dist., 524 U.S. 274, -, 118 S.Ct. 1989, 2000, 141 L.Ed.2d 277 (1998).

2 . We do not, however, concur with the dissent's statement that "[tjhere is nothing in the record to suggest that Kist’s conduct was anything but unusual or startling.” While the information is more relevant to a direct liability action than a respondeat superior claim, the record does show that two prior allegations of sexual misconduct against other female residents were levied against Kist during his employment at I.T.A.S.K.I.N. House.