Linda McLEAN, Plaintiff and Appellee, v. The KIRBY COMPANY, a DIVISION OF the SCOTT FETZER COMPANY and the Scott Fetzer Company, Defendants and Appellants, and Michael Molachek, Defendant. Linda McLEAN, Plaintiff and Appellant, v. The KIRBY COMPANY, a DIVISION OF the SCOTT FETZER COMPANY and the Scott Fetzer Company, Defendants and Appellees, and Michael Molacheck, Defendant.
Civ. Nos. 910230, 910238
Supreme Court of North Dakota
July 28, 1992
488 N.W.2d 229
Cahill, Maring & Marquart, Fargo, for defendants and appellants/appellees, Kirby Co. and the Scott Fetzer Co., argued by David S. Maring. Appearance by Daniel Dunn.
MESCHKE, Justice.
The Kirby Company, a division of the Scott Fetzer Company, and Scott Fetzer Company (hereinafter collectively referred to as Kirby) appealed from an amended judgment awarding Linda McLean damages from being raped in her apartment by Michael Molachek, a Kirby dealer. Kirby also appealed from orders denying its post-judgment motions. McLean cross-appealed from the judgment, amended judgment, and an order denying her motion for a partial new trial on her claim for punitive damages. We affirm.
Kirby manufactures vacuum cleaners and sells them through a marketing system of in-home demonstrations by door-to-door dealers. University Vacs, Inc., doing business as Kirby Co. of Fargo-Moorhead, Inc., owned by William L. Urie (hereinafter collectively referred to as Urie) became a Kirby distributor in 1972. Urie hired Molachek as a door-to-door dealer in December 1983. Urie performed no background investigation before hiring Molachek.
Molachek had been unemployed during the year before his employment with Urie as a Kirby dealer. During that year, Molachek was convicted of two assault charges and two weapons charges in Minnesota, and a Minnesota charge of criminal sexual conduct in the third degree was pending when Urie hired him.
On December 8, 1983, McLean let Molachek into her apartment to demonstrate a Kirby vacuum cleaner. Molachek also brought with him a set of knives, provided by the distributor, as a “door opener” or “gift offering” for allowing the in-home demonstration. After beginning the demonstration, Molachek used the knives in assaulting and raping McLean.
McLean sued Kirby, Urie and Molachek. McLean settled with Urie before trial. Molachek did not appear in the action. Liability of Kirby was premised upon the peculiar risk doctrine that is summarized in
One who employs an independent contractor to do work which the employer should recognize as likely to create, during its progress, a peculiar unreasonable risk of physical harm to others unless special precautions are taken, is subject to liability for physical harm caused to them by the absence of such precautions if the employer
(a) fails to provide in the contract that the contractor shall take such precautions, or
(b) fails to exercise reasonable care to provide in some other manner for the taking of such precautions.
The jury returned a special verdict that found Kirby and Urie negligent, found the negligence of each proximately caused McLean‘s damages, attributed 30 percent of the negligence to Kirby and 70 percent to Urie, fixed McLean‘s damages at $150,000, and determined that McLean should not be awarded exemplary damages against Kirby. Judgment was entered in accordance with the jury verdict. Kirby and McLean appeal.
Kirby raises these questions:
- DID THE TRIAL COURT ERR IN FAILING TO RULE, AS A MATTER OF LAW, THAT THE COMPLAINT OF THE PLAINTIFF FAILED TO STATE A CLAIM AGAINST KIRBY UPON WHICH RELIEF COULD BE GRANTED?
DID THE TRIAL COURT ERR IN FAILING TO RULE, AS A MATTER OF LAW, THAT THE CRIMINAL ACT OF DEFENDANT MICHAEL MOLACHEK WAS A SUPERCEDING CAUSE? - DID THE TRIAL COURT ERR IN RULING THAT DEFENDANT MICHAEL MOLACHEK‘S FAULT WOULD NOT BE COMPARED?
- WAS THERE SUFFICIENT EVIDENCE TO SUPPORT A VERDICT AS AGAINST KIRBY?
McLean raises these questions:
- DID THE TRIAL COURT ERR IN FAILING TO GIVE INSTRUCTION REGARDING THE MEANING AND DEFINITION OF RECKLESS DISREGARD ALLOWING FOR PRESUMPTION OF MALICE AND AN AWARD OF PUNITIVE DAMAGES?
- DID THE TRIAL COURT ERR IN GIVING AN INSTRUCTION THAT THE BURDEN OF PROOF FOR PUNITIVE DAMAGES WAS BY CLEAR AND CONVINCING EVIDENCE, RATHER THAN BY A PREPONDERANCE OF THE EVIDENCE?
I. Kirby‘s Appeal
1. Failure to state a claim.
Kirby asserts that the trial court erred in refusing to rule that McLean‘s complaint failed to state a claim against Kirby upon which relief could be granted. A complaint should not be dismissed under
We view the complaint in the light most favorable to the plaintiff and in light of
a. duty
Kirby argues that whether one owes a duty of care toward another is a question of law for the court to decide, and that “the trial court should have ruled prior to trial, at the close of Plaintiff‘s evidence, or at the close of all the evidence, that no duty existed as a matter of law.” Whether or not there is a duty is generally a question of law for the trial court, but if “the existence of a duty depends upon factual determinations, the facts must be resolved by the trier of fact.” Madler v. McKenzie County, 467 N.W.2d 709, 711 (N.D.1991).
This court long ago recognized a duty of care where injury is likely to result unless due precautions are taken:
The rule seems to be well established that where, in the making of an improvement of any kind, it is manifest that injury is likely to result unless due precautions are taken, a duty rests upon him who causes the work to be done to see that all necessary precautions are taken. Ruehl v. Lidgerwood Rural Tel. Co., 23 N.D. 6, 16, 135 N.W. 793, 795-96 (1912).
That decision recognized that the one who caused the work to be done (digging holes for telephone posts) could not escape liability for the death of a child who fell into an unguarded hole on the theory that an independent contractor had dug the holes. This court has also recognized the duty described in
In ruling on Kirby‘s motion for summary judgment on McLean‘s direct negligence claim against it, the trial court stated:
The issue of a duty owing to the Plaintiff by the Kirby Company and Scott Fetzer Company is not easily resolved; however, the Court is of the opinion that the Plaintiff has established a duty on the part of Kirby Company and Scott Fetzer Company to use reasonable care in seeing that its distributors employ reasonable care in the checking or investigating of the background and fitness of prospective door-to-door salespersons so as to minimize the risk of harm to others.
In ruling on Kirby‘s posttrial motions, the trial court stated:
The Court was of the opinion that, pursuant to Section 413, a duty did exist, as a matter of law, upon The Kirby Company and that the Plaintiff had established a prima facie case. Whether the work assigned was a “peculiar unreasonable risk” or that such risk was foreseeable to The Kirby Company were factual matters to be determined by the jury.
The trial court determined that Kirby owed McLean a duty of care and that McLean had established a case for submission to the jury. We conclude that the trial court correctly concluded that Kirby owed a duty to McLean.
Kirby markets its products through in-home demonstrations and sales. When potential purchasers admit Kirby dealers into their homes to demonstrate Kirby products for sales, there is a foreseeable and unreasonable risk of harm to those potential customers if those dealers have past histories of crime and violence. Only by requiring its distributors to investigate potential dealers before hiring them can Kirby reduce or eliminate this unreasonable risk of harm to potential purchasers of its products. We conclude that the trial court did not err in refusing to rule “that no duty existed as a matter of law.”
b. employer not liable for independent contractor‘s torts
Kirby argues that Urie was an independent contractor and that, unless there is a valid exception, an employer is not liable for the acts or omissions of an independent contractor. Kirby contends that “[e]xpansive adoption of rules which undermine the advantages of doing business through independent contractors may lead to the demise of this form of business, a form of business that has advantages for both the public and the employer.”
“We adhere to the general rule that an owner (employer) is not vicariously liable for the torts of the independent contractor or its employees.” Lumpkin v. Streifel, 308 N.W.2d 878, 880 (N.D.1981). In Schlenk v. Northwestern Bell Tel. Co., Inc., 329 N.W.2d at 608, this court said:
Our court has recognized the general rule that an employer is not liable for acts or omissions of its independent contractor. It has been stated, however, that the general rule of employer nonliability “is now primarily important as a preamble to the catalog of its exceptions“.
(Citations omitted.) This case involves an exception.
Courts have created exceptions to the general rule of employer nonliability for several reasons:
A number of considerations have led courts to depart from the rule of nonliability of an employer for the torts of an independent contractor. Some of the principal ones are that the employer is the one who primarily benefits from the contractor‘s work, the employer selects the contractor and is free to insist on a competent and financially responsible one, the employer is in a position to demand indemnity from the contractor, the insurance necessary to distribute the risk is properly a cost of the employer‘s busi-
ness, and the performance of the duty of care is one of great public importance. Aceves v. Regal Pale Brewing Co., 24 Cal.3d 502, 156 Cal.Rptr. 41, 44, 595 P.2d 619 (1979). Aceves involved liability pursuant to the doctrine stated in Restatement (2d) of Torts §§ 413, 416 .
As the court said in Majestic Realty Assocs., Inc. v. Toti Contracting Co., 54 N.J.Super. 419, 149 A.2d 288, 294 (1959), about the liability of a landowner that had employed an independent contractor to do demolition work: “[T]here is little to be said for a rule which leaves an innocent plaintiff remediless while the owner, who by hypothesis is held to have anticipated the harm which has occurred, is free to disclaim responsibility by having entrusted the work to a contractor.”
This court has recognized exceptions to the general rule of employer nonliability where “injury is likely to result unless due precautions are taken,” Ruehl v. Lidgerwood Rural Tel. Co., 135 N.W. at 795-96; where there is a “peculiar risk of physical harm to others unless special precautions are taken” per
c. peculiar unreasonable risk
Kirby contends that, as a matter of law, the door-to-door sale of vacuum cleaners does not create a peculiar unreasonable risk of harm. A more appropriate focus in this case is whether the “work” that Kirby engaged Urie to do—the recruitment and hiring of dealers for in-home demonstration and sale of Kirby vacuum cleaners—is work that Kirby “should recognize as likely to create, during its progress, a peculiar unreasonable risk of physical harm to others unless special precautions are taken.” As McLean states in a brief:
The recruitment of dealers by distributors was likely to create “a peculiar unreasonable risk of physical harm” if it resulted in the presence of a person with criminal or dangerous propensities in a person‘s home. “Special precautions” in the form of reasonable investigation of an applicant‘s background would minimize the risk of recruiting a dealer with criminal or dangerous propensities. The Kirby Company recognized the “peculiar unreasonable risk of harm,” that “special precautions” would minimize the risk, and its knowledge in this regard was superior to that of the distributors.
McLean asserts that Kirby had a duty to require its distributors to take such precautions, or otherwise exercise reasonable care to provide for the taking of such precautions, and that Kirby breached that duty.
An employer‘s placement of an employee in the home of another may create a risk of harm to the occupant if precautions are not taken in selecting the employee. This is illustrated by such cases as Ponticas v. K.M.S. Investments, 331 N.W.2d 907 (Minn.1983) (tenant raped by apartment manager who gained access with a passkey); Kendall v. Gore Properties, Inc., 236 F.2d 673 (D.C.Cir.1956) (tenant killed by a painter engaged by an apartment building resident manager, who gave the painter a key and unrestricted access to the tenant‘s apartment); Williams v. Feather Sound, Inc., 386 So.2d 1238 (Fla.App.1980) (guest in a condominium assaulted by a maintenance worker given passkeys); Fleming v. Bronfin, 80 A.2d 915 (D.C.App.1951) (woman assaulted in her apartment by a grocery deliveryman). These illustrative decisions say that liability may be imposed on the employer for not taking proper precautions.
Section 413 of the Restatement supports direct liability if the employer has reason to know that the independent contractor‘s work is likely to create a peculiar risk to others absent special precautions and if the employer takes no steps to minimize that risk by contract or otherwise. . . . The Restatement defines a “peculiar risk” as a risk “peculiar to the work to be done, and arising out of its character, or out of the place where it is to be done, against which a reasonable [person] would recognize the necessity of taking special precautions.”
(Citations omitted.) Good Humor at 1304-05.
The vendors do not possess any special experience or knowledge concerning the risks peculiar to their task. Good Humor, by contrast, has special and detailed knowledge of the peculiar risks to children involved in its operation and is in the best position to ensure reasonable safety awareness. Despite its concededly extensive knowledge of those risks, moreover, Good Humor has apparently chosen to disclaim responsibility for warning its vendors or for taking any precautions whatsoever against the known and specific dangers to children who purchase ice cream from their vendors. Id. at 1306.
Accordingly, we hold only that, under the circumstances of this case, Good Humor cannot insulate itself from liability in its own field of business when it engaged vendors to sell Good Humor products from the curbside, knew or had special reason to know of the risks to children inherent in its operation, and flatly refused to take any steps designed to minimize those risks, including warning its vendors. Under these circumstances, we conclude that the plaintiffs are entitled to a jury determination on Good Humor‘s liability under the peculiar risk doctrine. Id. at 1307-08.
Many of the reasons underlying Good Humor exist in this case as well.
Kirby had “reason to know that the independent contractor‘s work is likely to create a peculiar risk to others absent special precautions.” Kirby took “no steps to minimize that risk by contract or otherwise.” Urie had no special experience or knowledge about the risks peculiar to its task. Kirby had special knowledge of the peculiar risks to potential customers and was “in the best position to ensure reasonable safety awareness.” Kirby disclaimed responsibility for warning Urie or for taking any precautions against the dangers to which potential purchasers of Kirby products were exposed. We conclude that the work done by Kirby‘s independent distributors on behalf of Kirby involves a peculiar unreasonable risk of physical harm as a matter of law.
d. foreseeability
Kirby argues that it was not foreseeable that the work assigned to Urie would create a peculiar unreasonable risk of physical harm. Decisions dealing with liability based upon an employer‘s negligent selection of an employee, including Fleming v. Bronfin, Kendall v. Gore Properties, Inc., Ponticas v. K.M.S. Investments, Williams v. Feather Sound, Inc., and D.R.R. v. English Enterprises, CATV, 356 N.W.2d 580 (Iowa App.1984), illustrate the foreseeabil-
In Fleming v. Bronfin, a woman was assaulted in her apartment by a grocery deliveryman. The plaintiff sued for negligent selection and retention of the deliveryman. In reversing a directed verdict for the defendants, the court said, 80 A.2d at 917: “The duties of such employee carried him into homes where likely there would be women and children alone and unprotected and it was defendants’ duty to use reasonable care to select one reasonably fit to perform such duties.”
In Kendall v. Gore Properties, Inc., a tenant was killed by a painter hired by an apartment building resident manager, who gave the painter a key and unrestricted access to the tenant‘s apartment. The administratrix of the tenant‘s estate sued for negligent hiring and supervision of the painter. In reversing a directed verdict for the defendants, the court said, 236 F.2d at 678:
Slight care might be expected as to the employment of a yard man, not ordinarily to be sent into a tenant‘s apartment. But a very different series of steps are justified if an employee is to be sent, after hours, to work for protracted periods in the apartment of a young woman tenant, living alone.
. . . She was entitled to assume that appellees would introduce no intruder into her apartment. She had a right to expect that the landlord would not give up his set of keys to a stranger or so negligently fail to guard them that they might fall into the hands of one bent on mischief. . . .
To say that appellees may fail to make even the most cursory inquiry concerning [the painter] and then be allowed to excuse themselves in their ignorance is to say that their recklessness will be exalted.
In Ponticas v. K.M.S. Investments, 331 N.W.2d at 907, a tenant was raped in her apartment by an apartment manager who gained access with a passkey. The plaintiff sued the owner of the apartment complex, K.M.S. Investments, and the manager of the complex, Skyline Builders, for negligently hiring the apartment manager and issuing him a passkey to all units. In affirming a judgment against the defendants, the Minnesota Supreme Court said:
Liability is predicated on the negligence of an employer in placing a person with known propensities, or propensities which should have been discovered by reasonable investigation, in an employment position in which, because of the circumstances of the employment, it should have been foreseeable that the hired individual posed a threat of injury to others.
. . . The rationale employed in . . . cases involving [employees] who gain access to a dwelling by virtue of their employment, is that since plaintiff comes in contact with the employee as the direct result of the employment, and since the employer receives some benefit, even if only a potential or indirect benefit, by the contact between the plaintiff and the employee, there exists a duty on the employer to exercise reasonable care for the protection of the dwelling occupant to retain in such employment only those who, so far as can be reasonably ascertained, pose no threat to such occupant.
. . . We . . . hold that an employer has the duty to exercise reasonable care in view of all the circumstances in hiring individuals who, because of the employment, may pose a threat of injury to members of the public. Here, the respondent Stephanie Ponticas met Graffice as a direct result of his employment as apartment manager, and appellants received a benefit from Graffice‘s employment in having a caretaker for upkeep of the property and to aid tenants with complaints of property malfunction.
Therefore, we hold that these appellants owed to the tenants . . . the duty of exercising reasonable care in hiring a resident manager. 331 N.W.2d at 911. The court elaborated, 331 N.W.2d at 913:
[W]hen the prospective employee is to be furnished a passkey permitting admittance to living quarters of tenants, the employer has the duty to use reasonable care to investigate his competency and reliability prior to employment.
In Williams v. Feather Sound, Inc., a guest in a condominium was assaulted by a maintenance worker who had been given passkeys. In reversing a summary judgment in favor of the defendant in the plaintiff‘s suit for negligent hiring, the court said, 386 So.2d at 1240: “If an employer wishes to give an employee the indicia of authority to enter into the living quarters of others, it has the responsibility of first making some inquiry with respect to whether it is safe to do so.”
In D.R.R. v. English Enterprises, CATV, 356 N.W.2d 580 (Iowa App.1984), a woman was raped in her apartment by a cable TV installer who had been hired by English Enterprises, CATV, which had contracted to furnish personnel to connect American Heritage Cablevision, Inc.‘s, cable system to the television sets of individual residents. There was evidence that the installer had entered the woman‘s apartment with a master key. In reversing a summary judgment in favor of the defendants in the victim‘s negligent hiring action, the court said, 356 N.W.2d at 584:
We conclude that this evidence of access to a master key through employment with English, if true, is sufficient to create a special duty owed to plaintiff. . . . We therefore conclude there is a genuine issue of material fact whether English provided master keys to installers, thus creating a special duty to plaintiff, and whether the hiring of Logston without checking his criminal record was a breach of that special duty.
A similar question of fact exists with regard to American, even though English was an independent contractor.
These decisions demonstrate that there is a foreseeable risk of harm to the occupant when an employer allows an employee to enter a dwelling without first investigating the employee‘s fitness to enter. A dwelling is “a place traditionally associated with safety, privacy, and sanctity.” Cindy M. Haerle, Minnesota Developments, 68 Minn.L.Rev. 1303, 1317 (1984). An employer is subject to liability for negligently hiring an unfit employee without a prior investigation of the employee‘s fitness for entry into dwellings.
These decisions also demonstrate that a risk of harm is foreseeable to one who employs an independent contractor to hire employees and provide them with access to dwellings on the employer‘s behalf. The foreseeable risk of harm to the occupant of a dwelling is “a peculiar unreasonable risk of physical harm . . . unless special precautions are taken,” within the doctrine described in
In addition to the foreseeability that has been judicially recognized in the decisions discussed here, Kirby also had particularized knowledge that the risk of harm in this case was foreseeable and should have been recognized by Kirby. “[T]he extent of the employer‘s knowledge and experience in the field of work to be done is to be taken into account.”
Kirby relies on the following portion of a deposition of Susi Schieve, Customer Relations Manager in charge of the Customer Complaint Department from 1966 through 1988, to support its assertion that Kirby employees did not believe there was a peculiar risk of harm:
Q. Based on the criminal conduct that you became aware of during the course of your employment as customer relations manager, did you recognize that there was a possibility that crimes would be committed by dealers against persons in their homes?
A. To be truthful, no.
Q. Why didn‘t you recognize that as a possibility in light of the rape incident that you became aware of and in light of the half dozen incidents, approximate half dozen incidents of criminal conduct that you were aware of before January 1 of 1984?
*
*
*
*
*
*
THE WITNESS: I find it very unlikely to consider this by virtue of the volume of demonstrations and based on the number of complaints we receive.
*
*
*
*
*
*
Applying the number of contacts daily in the home of a consumer and the number of complaints we receive, these chances are minimal.
This testimony indicates that Schieve did not believe that the chances of a customer being the victim of a crime committed by a Kirby dealer in the customer‘s home were numerically high in relation to the total number of customers contacted by Kirby dealers. Still, this testimony confirms that Kirby‘s Customer Relations Manager was aware that a number of crimes, including a rape, had been committed by Kirby dealers in customer‘s homes.
Gene Windfelt, who became a dealer in 1964 and Chief Executive Officer of Kirby in 1988, testified that in 17 years as a distributor, he received two complaints about theft by his dealers from a customer. One of the complaints was determined later to be in error. Windfelt also testified that “over a 24-year span” he knew of one instance in which a woman alleged that “she was accosted” by a dealer. Larry Nichols, who began servicing and selling Kirby vacuum cleaners in 1965 and eventually became the Training Coordinator for Kirby, testified that he was aware of one incident of an alleged crime being committed in a customer‘s home. This incident involved the theft of a watch or ring. This testimony also indicates that highly placed Kirby personnel were aware that Kirby dealers had committed crimes in customer homes.
Kirby has promulgated a dealer application form that inquires about criminal convictions. Such a question on an application form evidences knowledge of risk. See Ponticas v. K.M.S. Investments, 331 N.W.2d at 914: “The record indicates that appellants were aware of possible risk of hiring a caretaker with a history of criminal activity in that the application form contained a question concerning the same.”
As McLean also stated in her brief, without contradiction by Kirby:
In its Professional Management Training Program between 1981 and 1983 for new distributors, the Kirby Company recognized and taught that inquiry of an applicant concerning his background, employment history and criminal record history, obtaining and contacting references and prior employers, and analyzing the information obtained, including analyzing gaps in employment, were important in screening dealers. . . . In this training program, the Kirby Company recommended that distributors contact the “authorities” and local police departments in doing background checks on dealers (T. 217).
McLean also asserted, without dispute, that this training was intended for new distributors only and that Urie did not receive this training.
We conclude that there was evidence of a foreseeable risk of physical harm to Kirby customers from dealers whose backgrounds were not investigated for fitness to enter customers’ homes. We further conclude that there was evidence that highly placed Kirby personnel had particularized knowledge from which a court or jury could reasonably infer foreseeability.
e. special verdict
Kirby contends that the trial court “did not rule, as a matter of law, that Kirby owed a duty to the Plaintiff based on Re-
Kirby requested that the trial court submit the following special verdict interrogatories to the jury:
5. On or before December 8, 1983, did the door-to-door sale of vacuum cleaners pose a “peculiar unreasonable risk” of physical harm to customers unless special precautions were taken?
6. If so, should it have been foreseeable to Kirby, on or before December 8, 1983, that the door-to-door sale of vacuum cleaners posed a “peculiar unreasonable risk” of physical harm to customers unless special precautions were taken?
Instead, the court submitted a special verdict inquiring only if Kirby was negligent and, if so, was its negligence a proximate cause of McLean‘s damages.
The pertinent part of
The trial court instructed the jury on peculiar unreasonable risk and on foreseeability. In ruling on a post-trial motion, the trial court explained:
Whether the work assigned was a “peculiar unreasonable risk” or that such risk was foreseeable to The Kirby Company were factual matters to be determined by the jury. Moreover, the Court did not determine that the jury must, by interrogatory, determine each of the essential elements of the duty imposed upon The Kirby Company. The Court determined that the jury was capable of determining ultimate fact.
In light of the trial court‘s instructions to the jury, the court‘s knowledge of the issues and evidence, and the court‘s ability to assess the capabilities of the jurors, we conclude that the trial court did not abuse its discretion in submitting the special verdict interrogatories.
f. breach of duty
Kirby contends that it did not breach a duty owed to McLean under the doctrine summarized in
The relevant parts of Kirby‘s distributorship agreement with Urie say:
5. Distributor‘s Primary Obligations: Distributor shall use its best efforts in (1) promoting, maintaining and increasing the in-home sale and use of Kirby Products in the Area, and (2) providing complete, convenient and qualified service to all users of Kirby Products in the Area. All such efforts shall be (1) in accordance with the purposes stated at the outset of this Distributor Agreement and all policies of the Company as such
policies may be established or revised from time to time by the Company, and (2) in complete compliance with all federal, state and local statutes and ordinances, and in particular Distributor shall attempt to comply with the rules and regulations of the Federal Trade Commission of the U.S. Government. Except as expressly provided in this Distributor Agreement, all obligations to be performed by Distributor shall be at Distributor‘s sole cost and expense. *
*
*
*
*
*
10. Relation of Parties.
(a) The relationship established by this Distributor Agreement is that of vendor and vendee, and all obligations to be performed by Distributor under this Distributor Agreement shall be performed by it as an independent contractor. Except as expressly provided in this Distributor Agreement, the Company shall exercise no control over the selection of Distributor‘s customers, employees, agents or representatives. The full cost and responsibility for hiring, firing and compensating employees of Distributor shall be borne by Distributor.
This contract language is not reasonably susceptible of a construction that Kirby imposed upon Urie a duty to take the special precautions necessary to ensure that its recruitment and hiring of dealers for in-home demonstration and sale of Kirby vacuum cleaners would not create a peculiar unreasonable risk of physical harm to people who admit Kirby dealers into their homes. This language has nothing to do with recruiting precautions and gives no indication that Kirby was requiring Urie to take any precautions in recruiting and hiring dealers.
Kirby also contends that it “took reasonable and appropriate measures in recommending a course of conduct for distributors“, that it “exercised reasonable caution,” and that it “should not be held liable under
Kirby conducted both Dealer Power Specialist (DPS) programs and Professional Management Training (PMT) programs. These programs were designed to provide guidance to distributors on proper procedures in establishing and running their businesses. Both Urie and Speaks [a Urie employee] attended at least one of these programs. Mr. Nichols was the Training Coordinator for Kirby during this period. He conducted seminars for the DPS and PMT programs. In conducting these seminars, Mr. Nichols provided written materials that the distributors would take back to their businesses. He would also make an oral presentation, summarizing the written materials. The written materials included recommendations in the following areas: the use of an application asking about criminal convictions; the need to conduct background and employment reference checks; the manner in which to conduct interviews with prospective dealers; and the techniques for screening applicants.
(Transcript citations omitted.) McLean, in her brief, responds to this argument:
Urie was not required or recommended by contract or policy to do background inquiry or investigation, received no training on how to conduct background inquiry or investigation, and received no warning or notice from the Kirby Company about incidents where dealers committed crimes in homes. The Kirby Company did not inquire in any way regarding distributors’ recruiting practices.
*
*
*
*
*
*
This training [on background checking] was provided at a cost, and was intended for and attended primarily by new distributors only. Urie and Speaks never received such training or attended this program. . . . [T]he seminar Nichols conducted was about “getting [applicants] in the door,” but not about background inquiry or checking.
*
*
*
*
*
*
The Kirby Company provided absolutely no policies, recommendations, training, suggestions or instructions to Urie or Speaks on interviewing applicants regarding their background or in screening
applicants (including whether and how to inquire regarding past criminal history, how to ask questions about an applicant‘s background, what or how to ask about a person‘s prior employment), the type of application form to use, how to review an application form, the significance of gaps in a person‘s employment, obtaining and checking references, or otherwise doing background inquiry and investigation of applicants.
(Transcript citations omitted.) This conflicting evidence created a question of fact for the jury to determine whether Kirby exercised reasonable care, under the circumstances, for the taking of such special precautions as were necessary to ensure that the recruitment and hiring of dealers for in-home demonstration and sale of Kirby vacuum cleaners would not create a peculiar unreasonable risk of physical harm to people who admit Kirby dealers into their homes.
g. conclusion
We conclude that the trial court did not err in refusing to rule, as a matter of law, that McLean‘s complaint failed to state a claim upon which relief could be granted.
2. Superseding cause.
The second question raised by Kirby is whether the trial court erred in refusing to rule, as a matter of law, that Molachek‘s criminal act was a superseding cause of McLean‘s injury. Relying on Hilligoss v. Cross Cos., 304 Minn. 546, 228 N.W.2d 585 (1975), where the court found that the criminal act involved was not foreseeable and, therefore, was an intervening efficient cause, Kirby contends: “As a matter of law, Kirby was not in a position to foresee that Urie‘s dealer would commit a criminal act. Since the act was not foreseeable, it amounts to a superceding, intervening cause.” We disagree.
The court in Hilligoss observed that, “to be a legally sufficient intervening cause, the criminal act itself must not be reasonably foreseeable.” Id. 228 N.W.2d at 586. In First Trust Co. v. Scheels Hardware & Sports Shop, Inc., 429 N.W.2d 5, 8 (N.D.1988), we said that “[t]he intervening negligence of another cannot be a superseding cause which extinguishes a tortfeasor‘s liability if that negligence was a foreseeable consequence of the situation created by the tortfeasor.” In Lang v. Wonnenberg, 455 N.W.2d 832, 837 (N.D.1990), we said: “An intervening cause must be both independent and unforeseeable.”
In Ponticas v. K.M.S. Investments, a tenant was raped in her apartment by an apartment manager who gained access with a passkey issued to him by the manager of the apartment complex. The tenant sued the owner of the apartment complex and the manager of the complex for negligent hiring. On appeal, the defendants contended that the trial court erred in refusing to instruct the jury on superseding intervening cause. The court ruled:
The inherent nature of a negligent hiring cause of action precludes the application of superseding intervening cause. By its definition, the factfinder—the jury—has already determined the injury-causing conduct of the employee was foreseeable. . . . Moreover, in negligent hiring cases the alleged intervening cause was created by the original negligence. . . . We conclude, therefore, there was no error in the trial court‘s refusal to instruct the jury on superseding intervening cause.
331 N.W.2d at 915-16. The same is true in an action seeking to impose liability under the doctrine described in
Kirby contends:
Molachek did not identify himself as a vacuum cleaner salesman before McLean allowed access to her apartment.
The opportunity for Molachek to commit a rape was not presented by Kirby. . . . Molachek was carrying only a briefcase
and did not get a vacuum until after she had allowed him in the apartment. The presence of the vacuum cleaner had nothing to do with the entrance into the apartment nor the crime. The criminal act is a superseding, intervening cause.
McLean responds:
McLean‘s testimony established that, while she may have opened the door before knowing that Molachek was a Kirby vacuum cleaner salesperson, she did not allow entrance into the apartment until after he had identified himself as a Kirby dealer and requested the opportunity to enter for a demonstration (T. 565). Molachek‘s “status” as a Kirby dealer was the sole reason McLean unsuspectingly allowed him into her apartment.
McLean testified that Molachek told her that he was selling or demonstrating Kirby vacuum cleaners before she opened the door. McLean also testified:
[M]y sister, Charlene had just bought a Kirby vacuum cleaner. And also a friend of mine, Jackie Senf, had purchased a Kirby vacuum cleaner. They both had demonstrations in their home. Jackie just loved her vacuum, said, “You will have to buy one.”
The jury could reasonably find from the evidence that Molachek would not have been admitted to McLean‘s apartment and would not have been able to commit his crime if he had not been a Kirby dealer.
A juror could reasonably infer that Molachek‘s status as a Kirby dealer was as much the key to his entry into McLean‘s apartment as the passkeys involved in cases like D.R.R. v. English Enterprises, CATV, Ponticas v. K.M.S. Investments, or Williams v. Feather Sound, Inc.; the apartment key in Kendall v. Gore Properties, Inc.; or the groceries in Fleming v. Bronfin. So, the jury could reasonably find from the evidence that Urie and Kirby created the opportunity for Molachek to assault McLean and, by failing to take or to require special precautions in the hiring of dealers, created the peculiar unreasonable risk of physical harm that was visited upon McLean.
We conclude that the trial court did not err in refusing to rule, as a matter of law, that Molachek‘s criminal act was a superseding cause of McLean‘s injury.
3. Comparing Molachek‘s fault.
Kirby contends that the trial court erred in ruling that Molachek‘s fault would not be compared with that of Urie and Kirby.
The trial court submitted the case to the jury to attribute the negligence of Urie and Kirby under the statute that was in effect at the time of McLean‘s rape:
Contributory negligence does not bar recovery in an action by any person or his legal representative to recover damages for negligence resulting in death or in injury to a person or property, if such negligence was not as great as the negligence of the person against whom recovery is sought, but any damages allowed must be diminished in proportion to the amount of negligence attributable to the person recovering. The court may, and when requested by either party shall, direct the jury to find separate special verdicts determining the amount of damages and the percentage of negligence attributable to each party; and the court shall then reduce the amount of such damages in proportion to the amount of negligence attributable to the person recovering. When there are two or more persons who are jointly liable, contributions to awards must be in proportion to the percentage of negligence attributable to each; provided, however, that each shall remain jointly and severally liable for the whole award. Upon the request of any party, this section must be read by the court to the jury and the attorneys representing the parties may comment to the jury regarding this section.
In Mauch v. Manufacturers Sales & Serv., Inc., 345 N.W.2d 338 (N.D.1984), we held that
However, in view of the Legislature‘s acceptance of comparative-negligence principles as demonstrated by its enactment of
Section 9-10-07, N.D.C.C. , and in following a course which we believe is most fair and just to all parties, we hold that where an unreasonably dangerous defect of a product and the plaintiff‘s assumption of risk or unforeseeable misuse of the product are concurring proximate causes of the injury suffered, the trier of fact must compare those concurring causes to determine the respective percentages by which each contributed. (Citations omitted.) We further hold that the comparison of causations under a products-liability claim should be on a pure comparative-causation basis, unlike the statutory scheme of modified comparative negligence underSection 9-10-07, N.D.C.C. Thus the plaintiff‘s misuse of the product will reduce the recovery by the percentage of damage attributable to the misuse but, even though equal to or greater than the causation attributable to the defective condition of the product, will not act as a total bar to the plaintiff‘s claim.
345 N.W.2d at 348. In Day v. General Motors Corp., 345 N.W.2d 349 (N.D.1984), we reached a similar conclusion that causes should be compared between a manufacturer and a user.
Kirby contends that “[i]n order to determine the amount owed by Kirby to McLean, if any, it was necessary for the jury to assign relative percentages of fault to Molachek, Urie and Kirby.” Kirby argues that
Mauch and Day are inapposite. We adopted comparative causation in those cases as a way of adjusting damage liability when a manufacturer and a consumer in a products liability action were both at fault—where an unreasonably dangerous defect in the defendant‘s product and the plaintiff‘s assumption of risk or unforeseeable misuse of the defendant‘s unreasonably dangerous defective product were concurring proximate causes of the injury suffered by the plaintiff. Here, no one has suggested that McLean was in any way responsible for her injury. There is no reason to apply Mauch and Day to reduce McLean‘s recovery.
Kirby argues that “the fault of Molachek . . . should, in fairness and justice . . . be compared” with that of Urie and Kirby. We do not agree. The negligence of Urie and Kirby placed Molachek in McLean‘s apartment, thereby enabling Molachek to rape McLean. It does not strike us as fair or just that McLean‘s recovery should be diminished by allowing Kirby to have its liability reduced by any “relative percentage[] of fault” that a jury might attribute to Molachek, who did not appear in the action and who was in McLean‘s apartment on behalf of Urie and Kirby and as a result of their negligence.
Relying on Horejsi v. Anderson, 353 N.W.2d 316 (N.D.1984), Kirby contends that Molachek‘s fault was imputed to Urie and was released when McLean entered into a settlement agreement with Urie. In Horejsi, this court held that a plaintiff‘s release of a servant also released the serv-
We are not persuaded by Kirby‘s argument that we should extend Horejsi and rule that the release of Urie released Molachek. Urie‘s liability to McLean, but for the settlement, would have been based upon respondeat superior, a vicarious liability, and negligent hiring, a direct liability. Kirby‘s liability under the doctrine described in
4. Insufficient evidence.
Kirby contends that “there was insufficient evidence to support the finding that any act or omission of Kirby was the proximate cause of McLean‘s injuries.” We disagree.
In reviewing fact questions tried to a jury, we view the evidence in the light most favorable to the verdict, and our review is limited to determining if there is substantial evidence to support the verdict. Dewey v. Lutz, 462 N.W.2d 435 (N.D.1990). The jury could find from the evidence that Kirby took no precautions to minimize the risk of harm to people who admitted Kirby dealers into their homes.
We believe that the jury could reasonably have agreed with McLean‘s assessment of the evidence:
[E]vidence and reasonable inferences therefrom established that, had the Kirby Company provided for special precautions in the recruitment of dealers, Urie would have incorporated those precautions into his recruitment practices.
Special precautions, in the form of reasonable, feasible and minimal background inquiry and investigation, were available and would have identified Molachek as a person with criminal and dangerous propensities.
Viewed in the light most favorable to the verdict, we conclude that there is substantial evidence to support the verdict. We, therefore, conclude that the evidence is sufficient to support the verdict against Kirby.
II. McLean‘s Appeal
McLean sought punitive damages. At the time of her rape,
In any action for the breach of an obligation not arising from contract, when the defendant has been guilty of oppression, fraud, or malice, actual or presumed, the court or jury, in addition to the actual damages, may give damages for the sake of example and by way of punishing the defendant.
The jury did not award punitive damages.
McLean contends that the trial court made two errors in instructing the jury on her claim for punitive damages: (1) the trial court erred in failing to give an instruction defining reckless disregard; and (2) the trial court erred in instructing that the burden of proof for punitive damages is by clear and convincing evidence, rather than a preponderance of the evidence.
1. Failure to define reckless disregard
The trial court instructed the jury that it could award punitive damages if it found “that the Defendant acted with oppression or malice as defined in these instructions.” The instructions defined malice:
The terms “malice” or “maliciously” import a wish to vex, annoy, or injure another person, or an intent to commit a wrongful act, established either by proof or presumption of law. Malice may consist of (1) a direct intention to injure another or (2) a reckless disregard of another‘s rights and the consequences that may result. Malice is not limited to a spiteful, malignant, or revengeful disposition and intent; it includes wrongful and improper motives as well as intent to commit a wrongful or improper act. If a wrongful or unlawful act is willfully or deliberately committed, the law presumes that the act was committed with unlawful intent.
Malice may be actual or presumed. “Presumed malice is ‘that state of mind which is
We do not believe that the term “reckless” is any less clear to persons of ordinary intelligence. Thus, while the trial court could have defined “reckless” or “reckless disregard” if it had deemed it necessary, we conclude that the trial court did not err in failing to define “reckless disregard.”
2. Burden of proof
McLean contends that the trial court erred in instructing that the burden of proof for punitive damages is by clear and convincing evidence, rather than by a preponderance of the evidence.
Since it was enacted, what is now codified as
McLean cites a number of decisions from other jurisdictions for the proposition that the appropriate burden of proof for punitive damages is a preponderance of the evidence. Kirby cites a number of decisions from other jurisdictions for the proposition that the appropriate burden of proof for punitive damages is clear and convincing evidence. In our view of the evidence presented in this case, we need not determine which burden of proof is appropriate.3
Mere negligence does not authorize an award of exemplary damages.
The judgment is affirmed.
ERICKSTAD, C.J., MESCHKE, J., and MAURICE HUNKE, District Judge, concur.
MAURICE HUNKE, District Judge, sitting as a member of the Court to fill the vacancy created by the resignation of Justice H.F. GIERKE III. Justice JOHNSON, not being a member of this Court at the time this case was heard, did not participate in this decision.
LEVINE, Justice, specially concurring.
I agree with most of the majority opinion but write specially to address an error by the trial court which is particularly troublesome.
The trial court should have decided the issue of Kirby‘s duty under
The jury found Kirby negligent and awarded damages to plaintiff.
Does this omission require a new trial? I agree it does not. I also agree that in-home demonstrations for purposes of sales present a peculiar unreasonable risk under
We are particularly vulnerable in our homes, removed from the public eye. Kirby‘s national reputation allows its representatives easier entry into our homes than might otherwise be the case. I agree with the majority that allowing an unscreened person into a home to demonstrate a product can produce a peculiar unreasonable risk of robbery, rape or murder, which imposes upon Kirby a section 413 duty of care to the plaintiff.
Because there was a duty under the peculiar risk exception, the jury‘s finding that
Kirby argues persuasively that the trial court should have decided the issue of Kirby‘s duty. Our response is that it did. However, the failure to inform the jury that it had so decided is surely not a paradigm of good trial practice. But, I agree that the verdict is sustainable.
VANDE WALLE, J., concurs.