Corporate Negligence Liability Does Not Depend on Whether a Particular Employee Is Liable; Hogan v. Magnolia Health Systems

Corporations are often liable for personal injuries as a result of a particular employee’s negligence. But what happens if the particular employee at issue is not liable? Does that absolve the corporation of liability? This case shows that it does not.

Magnolia runs an assisted living facility in Carmel where Hogan resided. One day, an employee caused a table to fall over, which injured Hogan. Hogan did not know the identity of the employee who caused the injury. Therefore, she identified the employee as “John Doe” when she filed her complaint against Magnolia.

During discovery, Hogan sent interrogatories to Magnolia to identify the John Doe employee. Magnolia said that it did not know which employee was allegedly at fault. But it also produced an incident report which identified two employees involved in the incident at issue, including Woods. The report stated that Woods placed items on a curio table, which caused the table to break.
Following a hearing, the trial court ordered Hogan to identify the John Doe employee. So Hogan filed an amended complaint identifying Woods (who was apparently changed her name and is now Young). Young then moved to dismiss based on the statute of limitations. The trial court granted that motion.

After Young was dismissed, Magnolia moved for summary judgment, arguing that it could not be liable under a respondeat superior theory of liability if the employee who was allegedly negligence was not liable. The trial court granted this motion, too, and Hogan appealed.

On appeal, the Court found that Magnolia’s theory was seriously flawed.

Magnolia claims that a plaintiff “cannot chose to sue ‘either’ an employer or employee under the theory of respondeat superior.” Contrary to Magnolia’s assertion, a plaintiff does, in fact, have the option of suing either the employee, employer, or both. There is no requirement that a plaintiff must sue the individual employee in order for an employer to be held liable for the employee’s conduct under the theory of respondeat superior; an employee only needs to have committed some act within the scope of employment for which he could be sued.

The Court distinguished this situation from those in which a decision about the employee’s liability was reached on the merits.

If our jurisprudence meant that the employee had to be named as a defendant and a judgment had to be entered against the employee for which he or she is legally obligated in order for the employer to be liable under respondeat superior, it would have so held. Instead, it is clear that where an employee has acted negligently, liability will be imputed to his or her employer by virtue of the employee/employer relationship because of the wrongful conduct. Where an employee is not negligent, his employer cannot be liable.

The takeaway from this case is fairly straightforward—a finding that an employee is not liable does not mean that the employer is not liable for that employee’s negligence, but a finding that the employee was not negligent does mean that the employer is not negligent.

Lessons:
1. A plaintiff must prove that an employee is negligent in order to recover against the employer under respondeat superior.
2. A plaintiff may prevail under a respondeat superior theory against an employer even if the plaintiff cannot obtain a judgment against the employee for a reason other than the merits of the case.

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