Judgment rendered November 18, 2020. Application for rehearing may be filed within the delay allowed by Art. 2166, La. C.C.P.
No. 53,615-CA
COURT OF APPEAL SECOND CIRCUIT STATE OF LOUISIANA
*****
MONICA D. DURAN Appellant
versus
ALLMERICA FINANCIAL BENEFIT INSURANCE COMPANY, THE MER ROUGE STATE BANK, LOUISIANA FARM BUREAU MUTUAL INSURANCE COMPANY AND GERALD FARRAR Appellees *****
Appealed from the Fourth Judicial District Court for the Parish of Morehouse, Louisiana Trial Court No. 2017314
Honorable Alvin Rue Sharp, Judge
THE DOWNS LAW FIRM, A.P.C. Counsel for Appellant By: E. Ross Downs, Jr. Earl R. Downs, III Hayden S. Downs
STREET & STREET Counsel for Appellant By: Daniel R. Street
NELSON, ZENTNER, SARTOR Counsel for Appellee, & SNELLINGS Allmerica Financial Benefit By: George M. Snellings, IV Insurance Company and F. Williams Sartor, Jr. The Mer Rouge State Bank
COTTON, BOLTON, HOYCHICK Counsel for Appellee, & DOUGHTY, LLP Louisiana Farm Bureau By: John B. Hoychick Mutual Insurance Company MURPHY, ROGERS, SLOSS, Counsel for Appellee, GAMBEL & TOMPKINS Gerald Farrar By: Ronald J. White
MASON L. OSWALT Counsel for Appellee, Gerald Farrar
Before GARRETT, COX, and THOMPSON, JJ. COX, J.
The suit arises out of the Fourth Judicial District Court, Morehouse
Parish, Louisiana. Monica Duran filed suit after a vehicle accident against
Allmerica Financial Benefit Insurance Company, The Mer Rouge State
Bank (“MRSB”), Louisiana Farm Bureau Mutual Insurance Company, and
Gerald Farrar. Ms. Duran appeals the trial court’s granting of two partial
motions for summary judgment in favor of MRSB and dismissal of her
claims against MRSB. For the following reasons we affirm the trial court’s
judgment granting MRSB’s partial motions for summary judgment on the
issues of vicarious liability and punitive damages and respectfully reverse
the trial court’s judgment granting MRSB’s partial motion for summary
judgment on the issue of negligent entrustment.
FACTS
For the purpose of this review of MRSB’s motion for summary
judgment, the following facts are not in dispute. On October 26, 2016, Mr.
Farrar, President of MRSB, was operating a 2015 Chevrolet Silverado,
owned by MRSB, on US Highway 425. As Mr. Farrar was traveling north
on the highway, the right front wheel of the vehicle became dislodged and
came to rest in the northbound lane. Ms. Duran and her guest passenger,
Brandon Burton, were traveling north on US Highway 425 when Ms.
Duran’s vehicle struck Mr. Farrar’s dislodged tire. Mr. Farrar was charged
by the investigating officer with driving while intoxicated.
On July 25, 2017, Ms. Duran filed a petition for damages against
Allmerica Financial, MRSB, Louisiana Farm Bureau, and Mr. Farrar.
Allmerica Financial provided general liability coverage to MRSB and Mr. Farrar. Louisiana Farm Bureau provided a general liability policy with
uninsured/underinsured motorist protection to Ms. Duran.
Ms. Duran claimed that Mr. Farrar did nothing to warn motorists of
the tire or remove the tire from the travel lane. She pointed out that at the
time of the accident, there was total darkness in the area. Ms. Duran was
driving her 2000 Toyota Tacoma north on U.S. Hwy 425 and came upon the
tire in the middle of the road. She stated that she could not see the dark tire
on the dark asphalt and struck the tire. She claimed there was a “tremendous
impact” after hitting the tire. Her injuries include permanent brain damage,
closed head injury, cognitive deficits, post-concussion headaches, injuries to
her lumbar and cervical spines, as well as the disc and muscles, depression,
and other injuries.
Ms. Duran alleged that Mr. Farrar’s wanton and reckless disregard for
the safety of others was the cause in fact of her injuries and MRSB is
responsible under the theory of respondeat superior. She also alleged that
the crash was caused by the independent fault of MRSB for negligently
entrusting the vehicle to Mr. Farrar, who it knew or should have known was
not competent to safely operate the vehicle.
MRSB, Mr. Farrar, and Allmerica Financial filed their answer and
denied the allegations. On January 14, 2019, MRSB filed a memorandum in
support of their motion for judgment on the pleadings and/or motion for
partial summary judgment. The issue raised by MRSB in its motion for
summary judgment is whether it can be liable for exemplary damages, under
La. C.C. art. 2315.4 and theories of vicarious liabilities and/or negligent
2 entrustment. MRSB also filed a motion for partial summary judgment as to
punitive damages.
Mr. Farrar’s deposition transcript is attached to MRSB’s motion. He
stated that he had a couple of accidents driving home from hunting land
while in a bank-owned vehicle. He stated, “A couple because Everglades is
barely a pig tail… You slide off the road there on Everglades once it gets
wet. I’ve had to pull several people out.” He stated that when he slid off of
the road, the police were not called because there was no accident and his
brother was able to pull him out of the ditch. He stated that he had one other
incident in a bank-owned vehicle before October 2016, which was when he
hit a “corduroyed spot” in the gravel and hit a tree. He described a
“corduroy spot” as a series of bumps in a gravel road, like a washboard. Mr.
Farrar stated that the truck was totaled, the sheriff’s office responded to the
accident, sobriety tests were not performed, a police report was filed, and he
informed at least one board member of the accident.
Mr. Farrar stated that in June of 2016, the vehicle had about 50 miles
on it and he took it to a dealership because the front right hub was making
noise. The dealership fixed the bearings that had gone out in the front right
hub. On October 22, 2016, Mr. Farrar stopped at a tire center with a flat.
When the technician at the tire center plugged the hole in the tire, he noticed
the axle nut had come loose so he fixed that as well. Mr. Farrar did not take
the vehicle for a follow-up inspection at the dealership before the accident
on October 26, 2016.
Mr. Farrar stated that he was prescribed Lorazepam in the spring of
2016 for anxiety and took it on the day of the accident. He stated that on the
3 day of the accident, he had a cocktail in a “short tumbler” before he left his
parents’ house. He stated that his cocktail contained one and one-half or two
ounces of bourbon, water, and ice. He stated that he may have one drink
before driving, but will not drive if he has more than one drink. Mr. Farrar
admitted that it was a violation of an unwritten bank policy for him to be
driving the vehicle after having one drink. He stated that he was on vacation
from the bank the week of the accident, and he was preparing for a hunting
trip out of town when he needed to go by MRSB to pick up the travel
itinerary for the trip before meeting his friend. He stated that on his way to
MRSB, about 6:30 p.m., the right front wheel came off of his vehicle,
causing him to hit a guardrail. He did not recall if there were any noises or
indications that the wheel was about to come off.
Mr. Farrar was taken by ambulance to the hospital and was found to
have a right ankle fracture. He stated that a state trooper came to the
hospital about two hours after the accident and asked him for a sobriety test.
Mr. Farrar stated he refused the test because he was already on an IV drip
with pain medicine. He did not recall having a conversation about his
alcohol consumption with an officer at the scene of the accident. Mr.
Farrar’s medical records note that he admitted to having a beer that evening.
Mr. Farrar stated that he suggested to MRSB’s Board of Directors
(“the Board”) that MRSB did not need to continue to provide vehicles to
employees because there was already insurance coverage in place for
employees driving their own vehicles to and from meetings and training.
Louisiana State Trooper Patrick Morris investigated the October 26,
2016 accident and arrested Mr. Farrar for DWI. He stated in his deposition
4 that he was notified of the accident at 7:28 p.m. He stated that he did not
believe that Mr. Farrar’s wheel came off and caused him to hit a bridge. His
investigation revealed that the bridge rail tore the wheel off of the hub
assembly and brake lines. He stated there would have been skid marks on
the road if the wheel had fallen off and the brake hub had hit the ground, but
the road was clear until Mr. Farrar hit the guardrail.
Trooper Morris stated he could smell alcohol on Mr. Farrar at the
scene, but did not administer a sobriety test at the scene because Mr. Farrar
was injured. He measured the distance from the impact with the guardrail to
Mr. Farrar’s stopped vehicle, which was 880 feet. Trooper Morris
administered a sobriety test on Mr. Farrar at the hospital after Mr. Farrar
admitted to having a few drinks earlier in the day. Because of Mr. Farrar’s
injury, the only field sobriety test he could administer was the horizontal
gaze nystagmus test, which Mr. Farrar did not pass.
Holly Farrar, Mr. Farrar’s wife, stated in her deposition that there was
a time when she was concerned about Mr. Farrar’s alcohol consumption.
She stated that she is not a drinker so any type of drinking is too much to
her. She recalled speaking with John Shackelford, a member of the Board,
about her marriage and concerns about Mr. Farrar’s drinking. Mrs. Farrar
was not aware of her husband’s DWI charge or his alcohol test result of
0.346.
Phillip McCready, vice president and a Board member of MRSB,
stated in his deposition that he did not know of any of the officers or
directors of MRSB consuming alcohol while on the job. He stated that he
had heard a general rumor in the community that Mr. Farrar had a problem
5 with alcohol. Pamela Farrar Turner, Mr. Farrar’s first cousin and MRSB
vice president, recalled Mr. McCready asking her once if she thought Mr.
Farrar was drinking, and she told him she did not know.
Mr. Shackelford, a board member of MRSB, stated in his deposition
that he had a conversation with Mrs. Farrar, who was concerned about Mr.
Farrar’s drinking, but when he spoke with her again later, she was no longer
concerned about it. He stated that before the October 26, 2016 accident, he
had no knowledge of Mr. Farrar ever driving the bank-owned vehicle while
intoxicated. The remaining board members stated in their depositions that
they were unaware of Mr. Farrar having a drinking problem.
An expert report from an Accident Reconstruction Specialist states
that Mr. Farrar failed to maintain his vehicle in the lane of travel, struck the
guardrail, and the impact caused the wheel to be torn off of the vehicle.
Ms. Duran filed a supplemental, amended, and restated petition for
damages and stated that both MRSB and Mr. Farrar were the operator of the
vehicle; both were legally intoxicated; both were wanton and reckless in
their disregard for others; and both drove 880 feet after the collision and did
not turn on the hazard lights. Ms. Duran requested compensatory and
punitive damages to punish the defendants. MRSB responded and again
argued that they were not liable under Louisiana law for the damages.
On July 13, 2019, the trial court judge granted MRSB’s partial motion
for summary judgment. The district court found that Ms. Duran could not
recover punitive damages under the facts of this case against MRSB under
La. C.C. art. 2315.4 or as a matter of law based on the alleged acts of its
6 employee. The district court dismissed Ms. Duran’s claim against MRSB
for punitive damages.
MRSB then filed a motion for partial summary judgment on the issue
of negligent entrustment. Both parties filed memos arguing their respective
side of the issues of negligent entrustment and vicarious liability. On
October 8, 2019, the district court granted MRSB’s motion for partial
summary judgment. The district court stated, “Essentially (among other
things), the president was on vacation at the time and was not doing banking
business… [T]he bank did not know (neither actually nor constructively)
that the president would drink to excess and drive a company car.” MRSB
was dismissed with prejudice from this civil action. Ms. Duran now appeals
those judgments.
DISCUSSION
Negligent Entrustment
Ms. Duran first argues that the trial court erred in granting MRSB’s
motion for summary judgment on the issue of negligent entrustment. She
argues that MRSB had actual knowledge that Mr. Farrar was a habitual
abuser of alcohol and was known to drive his bank-owned vehicle while
intoxicated and/or under the influence of alcohol for seven years prior to the
subject crash.
MRSB argues that a finding of negligent entrustment requires a
determination that MRSB knew, or should have known, that Mr. Farrar
would drink in legal excess and drive a company vehicle. It asserts that just
because a person or entity knows that an individual drinks alcohol does not
mean that the person or entity knows or should have known that the
7 individual would drive while legally intoxicated. It argues that the trial court
correctly granted summary judgment on the issue of negligent entrustment.
A de novo standard of review is required when an appellate court
considers rulings on motions for summary judgment, and the appellate court
uses the same criteria that governed the district court’s determination of
whether summary judgment was appropriate. Green v. Brookshire Grocery
Co., 53,066 (La. App. 2 Cir. 9/25/19), 280 So. 3d 1256. A court must grant
a motion for summary judgment if the motion, memorandum, and
supporting documents show that there is no genuine issue as to a material
fact and that the mover is entitled to judgment as a matter of law. La. C.C.P.
art. 966.
A fact is material if it potentially ensures or precludes recovery,
affects a litigant’s ultimate success, or determines the outcome of the legal
dispute. Green v. Brookshire Grocery Co., supra. A genuine issue of
material fact is one as to which reasonable persons could disagree; if
reasonable persons could reach only one conclusion, there is no need for trial
on that issue and summary judgment is appropriate. Jackson v. City of New
Orleans, 12-2742 (La. 1/28/14), 144 So. 3d 876, cert. denied, 574 U.S. 869,
135 S. Ct. 197, 190 L. Ed. 2d 130 (2014); Green v. Brookshire Grocery Co.,
supra. In determining whether an issue is genuine, a court should not
consider the merits, make credibility determinations, evaluate testimony, or
weigh evidence. Green v. Brookshire Grocery Co., supra.
Ms. Duran seeks review of the trial court’s granting of MRSB’s
motion for summary judgment on the issue of negligent entrustment.
Generally, an owner of a vehicle is not liable for damages which occur when
8 another is operating the vehicle. Oaks v. Dupuy, 32,070, (La. App. 2 Cir.
8/18/99), 740 So. 2d 263, writ not considered, 99-2729 (La. 11/24/99), 750
So. 2d 993. Exceptions to this rule occur when the driver is on a mission for
the owner of the vehicle, when the driver is an agent or employee of the
owner, and when the owner is himself negligent in entrusting the vehicle to
an incompetent driver. Id. Under the negligent entrustment theory, the
lender of a vehicle is not responsible for the negligence of the borrower
unless he knew or should have known that the borrower was physically or
mentally incompetent to drive. Id. However, absent a reason which would
place the owner on notice of the driver’s disability or incompetence, there is
no duty to make an inquiry into one’s driving habits or record. Matthews v.
Arkla Lubricants Inc., 32,121 (La. App. 2 Cir. 8/18/99), 740 So. 2d 787.
The issue of knowledge is often unsuitable for summary judgment
disposition. Oaks v. Dupuy supra .
In the case before us, it remains a genuine issue of material fact
whether MRSB knew or should have known of Mr. Farrar’s drinking
problem when entrusting him with a bank-owned vehicle. The Board
provided general oversight of the bank, but it is unclear what oversight the
Board exercised over Mr. Farrar. However, the Board was aware of Mr.
Farrar having a bank-owned vehicle to drive for both personal and business
purposes. Based on the deposition testimony, Mrs. Farrar made Mr.
Shackelford, a board member, aware of her concerns about her husband’s
drinking. Although Mr. Shackelford could not recall the details, he stated
that he spoke with Mrs. Farrar before the October 26, 2016 accident and she
was concerned about Mr. Farrar’s drinking. He stated that he had a second
9 conversation with her and she stated “she thought he was doing better” and
“she thought she had it under control.” Mr. Shackelford stated that since the
accident, he has paid close attention to Mr. Farrar and is not aware of Mr.
Farrar drinking.
Mr. McCready, also a board member, was aware of the small-town
rumors that Mr. Farrar had a problem with alcohol. He stated that the
thought had crossed his mind that Mr. Farrar had a drinking problem. As
well as being a board member, Mr. McCready is a vice president at MRSB,
and Mr. Farrar, as president, is his boss. He stated he was unaware of any
policy or procedure to address any misconduct of the bank president. The
board members’ deposition testimonies reveal that MRSB did not have a
written vehicle policy or drugs and alcohol policy at the time of the October
26, 2016 accident.
Based on the deposition testimonies of the Board members, there are
genuine issues about whether the Board should have known about Mr.
Farrar’s possible drinking problem. There is also a genuine issue of fact
regarding whether Mr. Farrar’s previous accidents in a bank-owned vehicle,
coupled with the rumors and conversations with his wife that he may have a
drinking problem, put the Board on notice that it should have investigated
Mr. Farrar’s competence to drive. These factual findings are not properly
determined on a motion for summary judgment. For these reasons, we
respectfully reverse the trial court’s judgment granting MRSB’s motion for
summary judgment on the issue of negligent entrustment and reinstate Ms.
Duran’s claim against MRSB for negligent entrustment. We make no
10 judgment on whether Ms. Duran will be successful in proving her case of
negligent entrustment.
Vicarious Liability
Ms. Duran argues the trial court erred in granting MRSB’s motion for
summary judgment on the issue of vicarious liability. She states there is a
jurisprudential presumption that an employee driving an employer’s vehicle
at the time of a collision is presumed to be within the course and scope of his
employment. Ms. Duran points out that Mr. Farrar was the “top human
functionary” of MRSB; the top person in charge and at all times subject to
his own “control;” had a company car; kept his own hours; worked late and
at odd times; always did some work when he went to the office; and, was on
his way to the office at the time the accident occurred. For these reasons,
she argues the trial court’s judgment on the issue of vicarious liability should
be reversed.
MRSB argues that the trial court correctly found that Farrar was not
acting within the course and scope of his employment with MRSB at the
time of the accident. It points out that the accident occurred when Mr.
Farrar was not conducting any business for MRSB, but while he was on
vacation and had been for several days. It states that it is undisputed that
Mr. Farrar was driving to MRSB at the time of accident, but he was doing so
for purely personal reasons—to pick up vacation-related documents.
Defendants contend that this proves that he was not motivated to serve the
master’s business, as required by law.
An employer’s vicarious liability for conduct not his own extends
only to the employee’s tortious conduct which occurs within the course and
11 scope of that employment. Orgeron v. McDonald, 93–1353 (La.7/5/94), 639
So. 2d 224; Winzer v. Richards, 50,330 (La. App. 2 Cir. 1/13/16), 185 So. 3d
876. The course of employment refers to time and place; scope refers to the
employment-related risk of injury. Benoit v. Capitol Mfg. Co., 617 So. 2d
477 (La.1993); Winzer v. Richards, supra.
An employer is responsible for the negligent acts of its employee
when the conduct is so closely connected in time, place, and causation to the
employment duties of the employee that it constitutes a risk of harm fairly
attributable to the employer’s business. Winzer v. Richards, supra. Factors
useful in determining whether the employee’s act was employment-related
include (1) the payment of wages by the employer; (2) the employer’s power
of control; (3) the employee’s duty to perform the act in question; (4) the
time, place, and purpose of the act in relation to the employment; (5) the
relationship between the employee’s act and the employer’s business; (6) the
benefits received by the employer from the act; (7) the employee’s
motivation for performing the act; and (8) the employer’s reasonable
expectation that the employee would perform the act. Orgeron v.
McDonald, supra; Winzer v. Richards, supra.
The general rule is that an employee, in going to and from work, is not
considered as acting within the course and scope of his employment so as to
render the employer liable to third persons for the employee’s negligence.
Winzer v. Richards, supra; Alford v. State Farm Auto. Ins. Co., 31,763 (La.
App. 2d Cir. 5/5/99), 734 So. 2d 1253, writs denied, 99-1435, 99-1595 (La.
9/3/99), 747 So. 2d 544. An exception to this general rule may apply when
an employer provides the transportation used by the employee to go to and
12 from work, the employer provides expenses or wages for the time spent
traveling in the vehicle, or the operation of the vehicle is incidental to the
performance of some employment responsibility. Winzer v. Richards, supra.
We agree with the trial court that MRSB is not vicariously liable for
the alleged tortious conduct of Mr. Farrar. In the case before us, Mr. Farrar
was given a bank-owned vehicle for both personal and business use, not for
the primary purpose of traveling to and from work. At the time of the
accident, Mr. Farrar was traveling to the office while on a scheduled
vacation for purely personal reasons—to pick up personal travel documents.
Mr. Gary Cater stated in his deposition that he was planning to travel with
Mr. Farrar, the trip was a personal hunting trip, which they had taken before,
and not associated with any banking business.
The factors useful in determining whether the employee’s act was
employment related are all in favor of MRSB: (1) Mr. Farrar had taken paid
vacation time off of work the week of the accident; (2) he was not under the
control of MRSB that week; (3) Mr. Farrar owed no duty to MRSB while
picking up those personal documents; (4) Mr. Farrar was travelling to the
bank after hours, while on vacation, for reasons unrelated to MRSB
business; (5) there is no relationship between Mr. Farrar’s drive to the bank
and MRSB business; (6) MRSB did not benefit from Mr. Farrar driving to
the bank that evening; (7) Mr. Farrar was motivated by his need to pick up
his personal travel documents; (8) MRSB had no reasonable expectation that
Mr. Farrar would be traveling to the office for personal reasons.
For these reasons, we affirm the trial court’s judgment granting
MRSB’s motion for summary judgment on the issue of vicarious liability.
13 Punitive Damages
Ms. Duran argues that MRSB should be vicariously liable for punitive
damages under La. C.C. art. 2315.4. However, because we agree with the
trial court that MRSB is not vicariously liable, we do not reach the issue of
whether punitive damages may be assessed against an employer under the
theory of vicarious liability. We affirm the trial court’s granting of MRSB’s
motion for summary judgment on the issue of punitive damages.
CONCLUSION
For the reasons stated above, the trial court’s judgment granting
MRSB’s partial motions for summary judgment on the issues of vicarious
liability and punitive damages are affirmed. The trial court’s judgment
granting MRSB’s partial motion for summary judgment on the issue of
negligent entrustment is respectfully reversed. Each party bears its own
costs associated with this appeal.
AFFIRMED IN PART AND REVERSED IN PART.