Top 10: Top 10 points on vicarious liability

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1. A principal is generally liable for an agent’s negligent acts performed within the scope of its authority under respondent superior, Parlato v. Equitable Life Assurance Society of the United States of America, 299 A.D.2d 108 (1st Dept. 2002). This follows the principal that the person in a position to exercise some general authority or control over the wrongdoer must do so or bear the consequences, L&L Plumbing & Heating v. DePalo, 253 A.D.2d 517 (2d Dept. 1998). There are, however, distinctions between vicarious liability or actions by agents who are independent contractors versus those who are employees.

2. As a general rule, a principal is not liable for the wrongful acts of an independent contractor it retains, Kleeman v. Rheingold, 81 N.Y.2d 270 (1993). The distinction between an employee and an independent contractor is one of control. An employee undertakes to achieve an agreed result, and agrees to accept the direction of an employer as to the manner by which to achieve this result. By contrast, an independent contractor undertakes to achieve an agreed result but is not subject to the orders of an employer as to the means, In re Morton, 284 N.Y. 167, 172, 30 N.E.2d 369, 371 (1940). Alternatively, an employer can be held vicariously liable for the tort of an independent contractor if the employer directed or took some affirmative part in the act from which the injury resulted, Cubby, Inc. v. CompuServe, Inc., 776 F.Supp. 135 (SDNY 1991).

3. In determining whether a party exercises a sufficient amount of control so as to give rise to an employer-employee relationship versus an independent contractor relationship the standard is that where one party maintains only “general supervisory powers” or exhibits only “incidental control” over the services performed, an employer-employee relationship does not exist, Lazo v. Mak’s Trading Co., 199 A.D.2d 165, 605 N.Y.S.2d 272 (1st Dept. 1993); Wright v. Esplenade Gardens, 150 A.D.2d 197, 540 N.Y.S.2d 805 (1st Dept. 1989); Baker v. Pimms, 209 A.D.2d 751, 617 N.Y.S.2d 976 (3rd Dept. 1994); In re Rukh, 208 A.D.2d 1105, 617 N.Y.S. 2d 547 (3rd Dept. 1994); In re Pavan, 173 A.D.2d 1936, 570 N.Y.S.2d 696 (3rd Dept. 1991).

4. The mere fact that a contract designates a party as an independent contractor is not dispositive of the issue. Rather the independent test is the existence of a right of control over the agent in respect to the manner in which his work is done, Isik Jewelry v. Mars Medina, Inc., 418 F. Supp. 2d 112 (EDNY 2005) citing Shah v. Lokhandwala, 265 A.D.2d 396 (2d Dept. 1999).

5. However, independent contractors can still subject their principals to vicarious liability when the facts fall into roughly three basic categories (a) negligence of the principal in selecting, instructing or supervising the contract or; (b) employment for work that is especially “inherently” dangerous; and (c) where the employer is under a specific nondelegable duty, Kleeman v. Rheingold, 81 N.Y.2d 270 (1993).

6. One who employs an independent contractor to do work involving a special danger to others that the employer knows or has reason to know to be inherently in or normal to the work, or that he contemplates or has reason to contemplate when making the contract, is subject to liability for physical harm caused to such others by the contractors failure to take reasonable precautions against such danger, McDonald v. Shell Oil Co., 20 N.Y.2d 160, 166 (1967).

7. In order for an employer to be vicariously liable, the employee’s tortious conduct must have been generally foreseeable and a natural incident of the employment, Corson v. City of New York, 290 A.D.2d 408, 736 N.Y.S.2d 71 (2d Dept. 2002). However, an employer does not need to have foreseen the precise act or manner of injury in order for the act to be foreseeable. If the general type of conduct may have been reasonably expected, foreseeability exists, Quadrozzi v. Norcem, Inc., 125 A.D.2d 559, 509 N.Y.S. 2d 835 (2d Dept. 1986).

8. An employer-employee relationship can be established by several factors, including whether the employer has the right to control the manner in which work is performed, the method of payment, and which party furnishes the equipment used to perform a task, Uppington v. New York, 165 N.Y. 222 (1901); Impastato v. De Girolamo, 117 Misc.2d 786, 459 N.Y.S.2d 512 (Special Term Kings Co. 1983).

9. The standard for deciding whether an employee was acting within the scope of his employment has been held to be whether the act was done while he was doing the employer’s work, no matter how irregularly, or with what disregard of instructions, Walker v. Weight Watchers Intern., 961 F.Supp. 32 (EDNY 1997); Arriaga v. State, 490 A.D.2d 663, N.Y.S.2d 221 (1st Dept. 1985). There are five factors to determine scope of employment: (1) connection between time, place, and occasion for the act; (2) history of the relationship between employer and employee as evidenced by actual practice; (3) whether the act is one which is commonly done by such an employee; (4) the extent of the departure from normal methods of performance; (5) whether the specific act was one an employer could have reasonably anticipated, Marley v. Ibelli, 203 F.Supp.2d 302, aff’d. 52 Fed.Appx. 564 (SDNY 2001).

10. There is no vicarious liability on the part of the employer for torts committed by an employee solely for personal motives unrelated to the furtherance of the employer’s business, Kirkman v. Astoria Gen. Hosp., 204 A.D.2d 401, 611 N.Y.S 2d 615 (2d Dept. 1994). However, an employee who acts in direct contradiction of his employer’s instructions can still be within the scope of employment, and the employer can thereby be held vicariously liable, Apollo Fuel Oil v. U.S., 73 F.Supp.2d 254, aff’d 195 F.3d 74 (EDNY 1999); O’Boyle v. Avis Rent-A-Car System, Inc., 78 A.D.2d 431, 435 N.Y.S.2d 296 (2d Dept. 1981).

Mark J. Moretti is a partner with the Rochester office of Phillips Lytle LLP.  He focuses his practice in business and tort litigation and is a former chairman of the New York State Bar Association’s Trial Lawyers Section. He can be reached at [email protected].