Aaron Engler v. Gulf Interstate Engineering Inc

SUPREME COURT OF ARIZONA
En Banc

AARON ENGLER, an unmarried man, ) Arizona Supreme Court
) No. CV-11-0273-PR
Plaintiff/Appellant, )
) Court of Appeals
) Division One
v. ) No. 1 CA-CV 10-0561
)
) Yuma County
GULF INTERSTATE ENGINEERING, ) Superior Court
INC., a corporation, ) No. CV200900353
)
Defendant/Appellee. ) O P I N I O N
_________________________________ )

Appeal from the Superior Court in Yuma County
The Honorable Mark W. Reeves, Judge

AFFIRMED
________________________________________________________________

Opinion of the Court of Appeals, Division One
227 Ariz. 486, 258 P.3d 304 (2011)

AFFIRMED
________________________________________________________________

DON B. ENGLER, P.C. Yuma
By Donald B. Engler

And

ABOUD & ABOUD, P.C. Tucson
By Michael J. Aboud
Attorneys for Aaron Engler

HOLLOWAY ODEGARD & KELLY, P.C. Phoenix
By Peter C. Kelly, II
Charles M. Callahan
Michelle N. Ogborne
Attorneys for Gulf Interstate Engineering, Inc.
________________________________________________________________
B E R C H, Chief Justice

¶1 In this case, we address whether an employer can be

held vicariously liable for an after-work accident caused by an

employee who was on an extended away-from-home assignment. We

hold that because the employee was not subject to his employer’s

control, he was not acting within the scope of his employment at

the time of the accident and the employer is therefore not

liable for his actions.

I. FACTS AND PROCEDURAL BACKGROUND

¶2 Ian Gray worked for Gulf Interstate Engineering, Inc.

(“Gulf”), a Texas-based energy consulting company. In 2007,

Gray worked on the design and construction of a natural gas

compressor for Gulf in Los Algodones, Mexico. Gray lived in

Houston and flew each week from Houston to San Diego, where he

rented a car and drove to Yuma. He stayed in a hotel in Yuma

and commuted each day to the worksite in Mexico.

¶3 Gulf reimbursed Gray’s business expenses, including the

cost of his lodging, rental cars, and meals. In addition, Gulf

paid Gray for his travel to and from the job site because his

work required him to cross an international border each day,

which often entailed significant delays, especially when

returning to Yuma. Gulf considered Gray’s work day to begin

when he left the hotel in Yuma and to conclude when he returned

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there. During after-work hours, Gulf did not attempt to

supervise Gray or control his activities.

¶4 On December 11, 2007, after a day of work in Mexico,

Gray returned to his hotel at approximately 7:30 p.m. Shortly

thereafter, Gray and a co-worker left the hotel in Gray’s rental

car to go to a restaurant. On the way back to the hotel after

dinner, Gray made an improper left turn and hit a motorcycle

driven by Aaron Engler, who sustained serious injuries.

¶5 Engler sued Gray and Gulf for his injuries, alleging

Gray’s negligence and Gulf’s vicarious liability. Gulf moved

for summary judgment, arguing that it could not be held

vicariously liable because Gray was not acting in the course and

scope of his employment when the accident occurred. Engler

filed a cross-motion, urging the court to find that all of

Gray’s activities while in Yuma were undertaken “solely to serve

the business purposes of Gulf Interstate until he returned” to

Houston. The trial court granted Gulf’s motion. Thirteen days

later, however, the court of appeals issued its opinion in

McCloud v. Kimbro (McCloud II), 224 Ariz. 121, 125 ¶ 17, 228

P.3d 113, 117 (App. 2010), which held “that an employee on out-

of-town travel status is within the course and scope of his

employment and subjects his employer to vicarious liability

while traveling to and from a restaurant for a regular meal.”

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Engler filed a motion for a new trial, but the trial court

distinguished McCloud II and denied the motion.

¶6 Engler appealed. The court of appeals affirmed,

holding that an employee on out-of-town travel status is not

acting within the course and scope of his employment while

traveling to or from a restaurant for a regular meal, a holding

inconsistent with the holding in McCloud II. See Engler v. Gulf

Interstate Eng’g, Inc., 227 Ariz. 486, 258 P.3d 304 (App. 2011).

Engler petitioned this Court for review.

¶7 We granted review to resolve the apparent conflict

between McCloud II and Engler. We have jurisdiction under

Article 6, Section 5(3) of the Arizona Constitution and A.R.S.

§ 12-120.24 (2003).

II. DISCUSSION

¶8 This case was decided on cross-motions for summary

judgment. The parties agree to the material facts, but disagree

as to the legal conclusion to be drawn from them. We review de

novo the superior court’s grant of summary judgment and construe

the facts and reasonable inferences in the light most favorable

to Engler, the non-prevailing party. See Andrews v. Blake, 205

Ariz. 236, 240 ¶ 12, 69 P.3d 7, 11 (2003).

¶9 “The doctrine of respondeat superior generally holds an

employer vicariously liable for the negligent work-related

actions of its employees.” Tarron v. Bowen Mach. & Fabricating,

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Inc., 225 Ariz. 147, 150 ¶ 9, 235 P.3d 1030, 1033 (2010). But

an employer is vicariously liable for such acts only if the

employee is acting “within the scope of employment” when the

accident occurs. E.g., State v. Super. Ct. (Rousseau), 111

Ariz. 130, 132, 524 P.2d 951, 953 (1974).

¶10 To determine the course and scope of employment,

Arizona courts have long considered the extent to which the

employee was subject to the employer’s control. See, e.g.,

Consol. Motors, Inc. v. Ketcham, 49 Ariz. 295, 305, 66 P.2d 246,

250 (1937); Rousseau, 111 Ariz. at 132, 524 P.2d at 953 (noting

that the “basic test” in tort actions arising out of vehicular

accidents is whether the employee is “subject to the employer’s

control or right to control” at the time of the accident);

Tarron, 225 Ariz. at 150 ¶ 12, 235 P.3d at 1033.

¶11 This approach is endorsed by the Restatement of Agency.

E.g., Ketcham, 49 Ariz. at 306, 66 P.2d at 250 (citing

Restatement (First) of Agency § 220 (1933)); Santiago v. Phx.

Newspapers, Inc., 164 Ariz. 505, 508-09, 794 P.2d 138, 141-42

(1990) (citing Restatement (Second) of Agency (“Restatement

(Second)”) § 220 (1958)). Several sections of the Restatement

(Second) identify relevant factors for determining whether the

employer exercised actual control or retained the right to

control the employee’s conduct when the negligent act occurred.

See Restatement (Second) §§ 219(2), 220(2), 228(1), 229(2).

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These factors include the previous relations between the

employer and the employee and whether the act (a) was the kind

the employee was hired to perform, (b) was commonly done by the

employee, (c) occurred within the employee’s working hours, and

(d) furthered the employer’s purposes or fell outside the

employer’s “enterprise.” See Higgins v. Assmann Elec., Inc.,

217 Ariz. 289, 297 ¶¶ 29-32, 173 P.3d 453, 461 (App. 2007)

(citing Restatement (Second) § 229); Anderson v. Gobea, 18 Ariz.

App. 277, 280, 501 P.2d 453, 456 (1972) (citing Restatement

(Second) § 228).

¶12 Applying these factors in previous cases to evaluate an

employee’s away-from-work conduct, we have not found the

requisite employer control when the employee maintained the

right to choose where, when, and how to travel, and by what

route. See Rousseau, 111 Ariz. at 132-33, 524 P.2d at 953-54.

Nor has reimbursement of travel expenses or “payment of a travel

allowance, without more” subjected the employer to liability.

Id. at 133, 524 P.2d at 954 (citing Lundberg v. State, 255

N.E.2d 177, 179 (N.Y. 1969)); see also Robarge v. Bechtel Power

Corp., 131 Ariz. 280, 284, 640 P.2d 211, 214 (App. 1982) (citing

Lundberg).

¶13 Although this case presents a fact pattern not

confronted in our previous cases — negligent driving by an

employee on out-of-town travel status — the same analysis

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applies: An employee’s tortious conduct falls outside the scope

of employment when the employee engages in an independent course

of action that does not further the employer’s purposes and is

not within the control or right of control of the employer.

Robarge, 131 Ariz. at 283-84, 640 P.2d at 213-14. This test

also comports with the Restatement (Third) of Agency

(“Restatement (Third)”) § 7.07, which consolidates the

“treatment of topics covered in several separate sections of

[the] Restatement Second, Agency, including §§ 219, 220, 228,

229, 230, 231, 232, 233, 234, 235, 236, 237, and 267.”1

Restatement (Third) § 7.07 (Reporter’s Note (a) (2006)). We

agree with the court of appeals that the Restatement (Third)

§ 7.07 sets forth the appropriate test for evaluating whether an

employee is acting within the scope of employment, and we adopt

it here. See Tarron, 225 Ariz. at 152-53 ¶¶ 24-28, 235 P.3d at

1
Restatement (Third) of Agency § 7.07 provides as follows:
(1) An employer is subject to vicarious liability for
a tort committed by its employee acting within the scope of
employment.
(2) An employee acts within the scope of employment
when performing work assigned by the employer or engaging
in a course of conduct subject to the employer’s control.
An employee’s act is not within the scope of employment
when it occurs within an independent course of conduct not
intended by the employee to serve any purpose of the
employer.
(3) For purposes of this section,
(a) an employee is an agent whose principal
controls or has the right to control the manner and
means of the agent’s performance of work, and
(b) the fact that work is performed gratuitously
does not relieve a principal of liability.
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1035-36 (following control test from Restatement (Third)

§ 7.03).

¶14 Applying the Restatement (Third) test, Gulf did not

exercise any control over Gray at the time of the accident.

Gray was not serving his employer’s interests in traveling to

and from the restaurant during his off hours, and Gulf did not

control where, when, or even if Gray chose to eat dinner. Once

Gray returned to his hotel at the end of the work day, he was

free to do as he wished. That he ate dinner with a work

colleague after work hours did not transform the social occasion

into a business activity. See Pham v. OSP Consultants, Inc.,

992 P.2d 657, 659 (Colo. App. 1999) (finding employee’s

patronage of bar with co-worker during after-work hours

unrelated to employer’s business) (citing Hynes v. Donaldson,

395 P.2d 221, 222-23 (Colo. 1964)). Because the accident

occurred while Gray engaged in an independent course of action

not intended to serve his employer’s work purposes, Gulf is not

vicariously liable.

¶15 Rather than focusing on the employer’s right to

control, Engler urges us to view scope of employment broadly,

applying workers’ compensation principles. Workers’

compensation is a no-fault system for compensating injured

employees that focuses on whether the employee was injured while

working or performing a work-related activity. Robarge, 131

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Ariz. at 282, 640 P.2d at 213. Workers’ compensation laws are

liberally construed and applied to benefit the injured employee.

See Grammatico v. Indus. Comm’n, 211 Ariz. 67, 72 ¶ 23, 117 P.3d

786, 791 (2005). In McCloud II, the court of appeals recognized

that workers’ compensation principles may provide guidance in

vicarious liability cases. 224 Ariz. at 123-24 ¶ 10, 228 P.3d

at 115-16 (citing Anderson, 18 Ariz. App. at 280, 501 P.2d at

456). But we disagree that those standards should apply here.

Workers’ compensation and tort law differ in purpose and scope.

Robarge, 131 Ariz. at 282, 640 P.2d at 213. Workers’

compensation covers injured employees, whereas “respondeat

superior subjects employers to liability for injuries suffered

by an indefinite number of third persons.” Id. (citing Luth v.

Rogers & Babler Constr. Co., 507 P.2d 761, 764 (Alaska 1973)

(superseded by statute on other grounds)). The concept of

“scope of employment,” when used in the tort context, is tied to

the employer’s right to control the employee’s activity at the

time of the tortious conduct. Robarge, 131 Ariz. at 282, 640

P.2d at 213; see also Throop v. F. E. Young & Co., 94 Ariz. 146,

153, 382 P.2d 560, 564 (1963) (noting that workers’ compensation

cases are not necessarily authority for determining common-law

liability under the doctrine of respondeat superior). We

therefore decline Engler’s invitation to apply workers’

compensation principles to this tort inquiry.

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¶16 Engler next urges us to hold that all of Gray’s

activities while in Yuma furthered Gulf’s business purposes. He

insists that they were “not merely a large part of Mr. Gray’s

employment — [they were] his employment.” Engler, 227 Ariz. at

489 ¶ 9, 258 P.3d at 307. We disagree. Whether the employee

was subject to the employer’s control must be assessed at the

time of the employee’s tortious act. Carnes v. Phx. Newspapers,

Inc., 227 Ariz. 32, 35 ¶ 10, 251 P.3d 411, 414 (App. 2011). At

the time of the accident, Gulf exercised no control over Gray.

¶17 Engler similarly maintains that Gulf exercised control

over Gray because Gray had to eat during his lengthy away-from-

home work assignment. We agree that Gray had to eat, but

disagree that this converts Gray’s personal time into work time.

Not every activity of an employee on a work assignment is under

the employer’s control, even if the employer understands that

such activity is necessary or might occur. See, e.g.,

Scottsdale Jaycees v. Super. Ct. (Weaver), 17 Ariz. App. 571,

575, 499 P.2d 185, 189 (1972).

¶18 Engler relies on State Department of Administration v.

Schallock, 189 Ariz. 250, 941 P.2d 1275 (1997), to support the

argument that any conduct incidental to authorized conduct

should fall within the scope of employment and render the

employer subject to liability. Although Schallock cites the

Restatement (Second) factors to determine whether conduct not

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expressly authorized falls within the course and scope of

employment, it provides little guidance. Schallock involved

managerial sexual harassment. Id. The employee in Schallock

was able to carry out his harassment in part because he was a

supervisor, and the harassment occurred as part of his

“supervision” of the plaintiff, id. at 261-62, 941 P.2d at 1286-

87, a situation far different from the one before us. The Court

itself recognized that “special factual and legal

considerations” distinguish such cases “from the great majority

of cases involving torts committed by a servant against” a third

party. Id. at 257, 941 P.2d at 1282.

¶19 Finally, Engler encourages us to follow the analysis in

McCloud II. We decline to do so. As a preliminary matter, we

note that McCloud II involved an administrative regulation

providing that a DPS officer comes “within the course and scope

of employment when driving a state-owned vehicle if driving ‘to

and from meals while on out-of-town travel.’” 224 Ariz. at 125

¶ 15, 228 P.3d at 117 (quoting Ariz. Admin. Code R2-10-

107(A)(2)(d)). That regulation does not apply here. But to the

extent that McCloud II suggests that employees generally are

acting within the course and scope of their employment when

“driving to a restaurant” while off duty during an extended out-

of-town assignment “because eating is incidental to a multiple-

day assignment,” id. ¶ 17, we disagree.

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¶20 In sum, analysis of Gulf’s control over Gray at the

time of the accident reveals that Gray was on his own time, was

not subject to his employer’s control, and was not serving his

employer’s purposes in traveling from the restaurant during his

off hours.

III. CONCLUSION

¶21 For the reasons set forth above, we affirm the judgment

of the superior court and the opinion of the court of appeals.

__________________________________
Rebecca White Berch, Chief Justice

CONCURRING:

_____________________________________
Scott Bales, Vice Chief Justice

_____________________________________
A. John Pelander, Justice

_____________________________________
Robert M. Brutinel, Justice

_____________________________________
*

* Before his resignation on June 27, 2012, as a result of his
appointment to the United States Court of Appeals for the Ninth
Circuit, Justice Andrew D. Hurwitz participated in this case,
including oral argument, and concurred in this opinion’s
reasoning and result.

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