Utah Supreme Court issues Important Decision Holding Employers May Owe Duty of Reasonable Care to Third-Party in Hiring, Traning & Supervising Employees

In a recent decision written but Justice Lee (with a very well-reasoned dissent by Justice Nehring), the Utah Supreme Court in Graves v. North Eastern Services, Inc., 2015 UT 28, held that the “fault” to be apportioned under Utah Code Section 78B-5-818 (Utah's comparative negligence statute) is not limited to negligence but extends to intentional torts. Additionally, and perhaps more importantly for Utah employers, the Court held that employers may owe a duty of reasonable care to third-parties in hiring, training and supervising employees in certain circumstances. Lastly, the Court held that expert testimony on the standard of care was not needed with respect to questions of ordinary negligence. Where the standard implicates scientific matters beyond the capacity of an ordinary juror, however, expert testimony may be required, such as in medical malpractice cases.

In Graves, the parents of a minor girl who had been assaulted at one of the Defendant's client'' residences, filed suit against the assaulting employee and later added claims against his employer based upon its negligence in hiring, supervising and training the assaulting employee.  After discovery, the employer filed a motion for summary judgment claiming, among other things, that it owed no duty of care to the minor - a third-party guest in the home of the Defendant's clients - in its hiring, training, and supervision of employees. Soon after the filing of the  motion, the parents voluntary dismissed their claims against the assaulting employee. The Defendants then filed a notice asserting their intention to seek apportionment of comparative fault to the employee under Utah Code Section 78B-5-818. The District Court denied the motion for summary judgment on the negligence claims. It also approved dismissal of the assaulting employee as a defendant and ruled that apportionment as to his intentional conduct was improper under section 78B-5-818.  The Court's ruling was then appealed to the Supreme Court.

The Supreme Court affirmed in part and reversed in part the District Court's decision, holding 1) that  the “fault” to be apportioned under Utah Code Section 78B-5-818 is not limited to negligence but extends to intentional torts; and 2) that employers owe a duty of reasonable care in the hiring, training and supervising of employees.

The facts at issue on the summary judgment motion were fairly straightforward. One of the Defendants provided residential treatment services to mentally and physically disabled clients under a contract with the State of Utah, Department of Human Services. It provided services to its clients under a plan of care, which included, in some cases, interaction with children as part of the care plan. The services were provided in residential neighborhoods at various locations. At a duplex where services were being provided to clients, a minor girl was sexually assaulted by an employee.

The record indicated that the main door to the duplex was often left open during the summer, allowing children to come in or out as they pleased. One of the residents of the duplex was known for having candy on hand in his room. When neighborhood children asked about candy, the Defendant's staff would sometimes retrieve it for them from the client’s room. Alternatively, the client or the staff would sometimes invite the children into the duplex to find the candy. The record also indicated that the Defendant's staff had maintained a portable swimming pool outside the open door to the duplex. The principal purpose of the pool was for the benefit of a client, and neighborhood children often used it to play in during the summer. Neighborhood children also often entered the residence to watch television or videos with the residents and/or Defendant's staff.

The minor  was sexually abused by an employee. On that day the minor was playing in the common area outside of the duplex, asked for some candy, and was invited into the residence to watch television with the employee and one of the residents. The minor was then sexually assaulted by the employee in a bathroom of the residence.

At issue on Defendant's motion for summary judgment were the Defendant's actions in hiring and supervising the employee, and training staff. The evidence established that the employee who had assaulted the minor had been terminated from a recent job in the same field for sexually abusive conduct, The employer, in its interview, apparently never asked about  previous employment, and the interviewing employee indicating that she had never been trained to ask such questions. The evidence was disputed as to whether the employer had contacted the assaulting employee's former employer to obtain information regarding his prior employment. In addition, the assaulting employee's supervisor had received no training on how to keep children safe from assault or other harm.

In holding that the employer owed a duty of care to the minor, the Court emphasized the distinction between malfeasance and misfeasance, based on its precedent, and noted that "a key threshold question regarding duty is whether the plaintiff’s harm is alleged to have been caused by (a) an affirmative act of the defendant or (b) an act of a third party that the defendant failed to prevent.  In the former case, the duty of care is clear. However, "in the latter case the general rule is the contrary. A person generally has 'no duty to control the conduct of third persons.'"

However, the Court emphasized that a defendant may have a duty to control the conduct of third persons where a special relationship exists between the parties. Relying on Section 317 of the Restatement (2nd) of Torts, the Court found the basis for a duty of an employer to exercise reasonable care in preventing an employee from acting outside the scope of employment in “intentionally harming others.” The duty requires "proof (a) that the employee who intentionally harms another is on premises he is entitled to enter only by virtue of his status as an employee, and (b) that the employer knows or has reason to know that he has the ability to control the employee and knows or should know of the necessity and opportunity for exercising such control. In this cause, the Court found that "it was more than foreseeable" that Defendant's employees would come into contact with the public, and children, and thus the employer should have known of the necessity and opportunity for exercising control over the employee.

In a puzzling move that potentially allows negligent employers and others to escape meaningful liability, the Court held that fault under the comparative fault statute should be apportioned among intentional torts.  Finding that apportionment under the comparative negligence statute is not just for breaches of duty but for any act or omission that proximately causes or contributes to injury or damages, the Court read the text of the  statute to call for apportionment for torts like the sexual assault committed in this case.

The opinion includes a very forceful and well-written decent from Justice Nehring arguing that the Utah Legislature did not intend for the allocation of fault to include intentional torts. Central to his dissent are the policy implications of the Court's holding. Noting that "the concern that allowing allocation to intentional tortfeasors could have the consequence of rendering the duty of reasonable care by others unenforceable, making it unlikely that a jury would ever allocate a significant portion of fault to an unintentional actor.