No Respondeat Superior for Impaired Driver

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In Gerard Loftus, et al. v. Three Palms Crocker Park, LLC, et al., Appeal by Robert Sotka, 2023-Ohio-927, No. 111639, Court of Appeals of Ohio, Eighth District, Cuyahoga (March 23, 2023) an intoxicated person injures a passenger when he lost control of a vehicle at 120 miles per hour and crashed.

Robert Sotka appealed the trial court’s grant of summary judgment in favor of his employer, Three Palms Crocker Park, LLC (“Three Palms”) and its insurer, State Auto Mutual Insurance Company (“State Auto”).

FACTUAL OVERVIEW

Plaintiff Gerard Loftus was severely injured as a passenger in a single-car accident in which Sotka was the driver. Sotka was the manager at the Three Palms pizzeria restaurant. Sotka had discussions with Loftus about potentially purchasing a restaurant with him.

Sotka left the restaurant at 5:15 p.m. and traveled over 60 miles to the Canoe Club to meet Loftus and a group of Loftus’s friends. At around 10:15 p.m., Sotka was driving exceeding a speed of 120 m.p.h. The car left the road and hit a guardrail, causing extensive damage. Sotka’s passenger, Loftus, suffered extensive and permanent injuries. Sotka was later convicted of the crimes of Operating Vehicle Under the Influence of Alcohol or Drugs – OVI, a misdemeanor of the first degree, and Vehicular Assault, a felony of the fourth degree in the Ottawa County Court of Common Pleas.

Loftus sued Sotka and Three Palms, Sotka’s employer. State Auto, who had issued Three Palms a business insurance policy, intervened in the lawsuit and sought a declaratory judgment action that it need not provide a defense or coverage because the accident that resulted in Loftus’ injuries was not covered by the insurance policy because Sotka was not conducting or furthering its business when he crashed his car injuring Loftus.

The trial court granted summary judgment to both Three Palms and State Auto.

LAW AND ARGUMENT

An employer may be subject to respondeat superior liability for an employee’s accident when that employee is acting within the scope of employment. Conduct is within the scope of a servant’s employment if it is of the kind which he is employed to perform, occurs substantially within the authorized limits of time and space, and is actuated, at least in part, by a purpose to serve the employer.

State Auto’s insurance policy provides liability coverage to Three Palms pursuant to the Commercial General Liability Coverage (“CGL policy”). The parties agreed that the CGL policy specifically excludes damages from motor vehicle accidents pursuant to exclusion. The Auto Endorsement provides CGL coverage for damages arising out of the use of any “non-owned auto” in the business by any person.

There was no dispute that Sotka was driving a non-owned auto as defined by the Auto Endorsement. However, the Auto Endorsement only provides coverage while the non-owned auto is being used in Three Palms’ business.

The trial court determined that neither condition was present upon the record and specifically found that there are no genuine issues of material fact that defendant Sotka was not within the course and scope of his employment with defendant Three Palms Crocker Park, LLC at the time of the subject accident.

The court noted that Sotka left the restaurant at 5:15 p.m., traveled a distance of over 60 miles, and admitted the purpose of his trip was to meet with his friend and soon to be new business partner, Loftus. There was no evidence Sotka went to Catawba for any business purpose to benefit Three Palms. Traveling 60 miles and socializing to pursue personal business unrelated to his employer cannot be deemed to be in the service of Three Palms.

Considering Sotka’s conduct in total, assuming he contacted employees and spoke with others about the general aspects of the operation of a restaurant, those actions are merely incidental to the purpose of his evening: socializing with Loftus and furthering a personal business venture. Moreover, the restaurant employees present on the evening of the accident closed the restaurant without Sotka’s direction or input.

The record reflects that Sotka’s purpose in going to Catawba that evening was to socialize and further his own personal business opportunities. Arguing that the accident occurred while Sotka was acting within the scope of his employment or in furtherance of Three Palms’ business, was unbelievable.

Sotka committed the offenses of operating a vehicle under impairment, and vehicular assault, a felony. This conduct cannot fairly and reasonably be deemed to be an ordinary and natural incident or attribute of the service to be rendered, or a natural, direct, and logical result of the pizzeria.

After spending an evening drinking and reviewing potential opportunities to obtain a new, and personal business with an acquaintance, and then (while intoxicated) starting a return ride at more than 120 miles per hour to take his acquaintance home or to the restaurant owned by Sotka’s employer, Sotka was convicted of a felony as a result of his driving and the injuries of the plaintiff. The conduct was obviously not part of Sotka’s employment as the manager of a Pizzeria and, therefore, no coverage from the employer or the employer’s insurer.

(c) 2023 Barry Zalma & ClaimSchool, Inc.

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Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com

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