Glass, N. Productions v. Erica Enterprises
Glass, N. Productions v. Erica Enterprises No. 3697 EDA 2016
| Pa. Super. Ct. | Aug 31, 2017Background
- Nancy Glass Productions (NGP) contracted with Erica Enterprises (EEI)/System4 franchisor for janitorial services; EEI assigned the account to unit franchisee Kevin Luke.
- In Feb. 2012 Luke and/or his crew allegedly committed theft and sexual activity at NGP’s offices; Luke admitted one sexual encounter but denied theft.
- NGP sued EEI and System4, LLC asserting direct negligence (negligent hiring/supervision), vicarious liability, breach of contract, conversion, and punitive damages; Luke was later joined and then dismissed from the case by NGP.
- Defendants moved for summary judgment arguing (1) Luke was an independent franchisee (no vicarious liability), (2) even if an employee his acts were outside the scope of employment, and (3) no basis for direct negligent hiring/supervision liability because prior convictions did not indicate propensity for theft/sexual misconduct.
- The trial court granted summary judgment to defendants; on appeal the Superior Court affirmed, holding defendants not vicariously or directly liable and punitive damages unsupported.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Vicarious liability (employee vs. franchisee) | EEI had sufficient control to create employer liability; reasonable jury could find employee status | Luke was an independent franchisee; if employee, his acts were outside scope of employment | Court: Even if employee, Luke’s intentional theft/sex was outside scope; if franchisee, no vicarious liability — summary judgment affirmed |
| Negligent hiring/supervision (direct liability) | EEI failed to conduct background checks or reasonable screening; motive to avoid screening to sell franchises | EEI argues prior convictions (assault, weapons) were not predictive of theft/sexual misconduct; no foreseeable risk requiring discovery/control | Court: Prior convictions did not put EEI on notice of propensity for these acts; no genuine issue of material fact — summary judgment affirmed |
| Punitive damages | EEI’s alleged practice of avoiding background checks was reckless and motivated by financial interest in franchise sales | Defendants say punitive damages require underlying liability and outrageous conduct by defendants, which are not proven | Court: Punitive damages ancillary to tort claims; because defendants not liable, punitive damages fail |
| Scope of employment test | NGP argued conduct occurred on premises during cleaning, which could fall within employment time/place | Defendants emphasized the acts were purely personal and far removed from duties | Court: Conduct not actuated to serve employer; falls outside scope — dispositive against vicarious liability |
Key Cases Cited
- Hovis v. Sunoco, 64 A.3d 1078 (Pa. Super. 2013) (summary judgment standard and viewing facts for nonmoving party)
- Cassel-Hess v. Hoffer, 44 A.3d 80 (Pa. Super. 2012) (summary judgment and appellate review principles)
- Drexel v. Union Prescription Centers, Inc., 582 F.2d 781 (3d Cir. 1978) (no vicarious liability for independent contractor/franchisee)
- Fitzgerald v. McCutcheon, 410 A.2d 1270 (Pa. Super. 1978) (employer vicarious liability requires acts within scope of employment)
- R.A. v. First Church of Christ, 748 A.2d 692 (Pa. Super. 2000) (intentional misconduct outside scope of employment; summary judgment appropriate in some cases)
- Costa v. Roxborough Mem'l Hosp., 708 A.2d 490 (Pa. Super. 1998) (employer liability for intentional/criminal acts requires connection to employment)
- Hev v. Simplex Box Corp., 198 A. 309 (Pa. 1938) (acts wholly personal and unrelated to job defeat vicarious liability)
- Baker v. Pa. Nat'l Mut. Cas. Ins. Co., 559 A.2d 914 (Pa. 1989) (punitive damages require proof of outrageous conduct)