Lyon v. Carey

A student asked:

Dear Rip,

I'm puzzled why the court in Lyon imposed vicarious liability on Pep Line Trucking but not on the other corporate defendant, George's Radio and Television Company, the company that contracted with Pep Line to deliver the mattress to the plaintiff's sister. The Lyon court does not explain why George's Radio was not found liable. Do courts generally allow companies to escape vicarious liability for harm to customers that are caused by agents working as contract employees? This seems to go against the rationale that the Lyon court cites in its finding Pep Line Trucking vicariously liable for the acts of the delivery man:

"[Unless respondeat superior is maintained] it will always be more safe and profitable for a man to conduct his business vicariously than in his own person. He would escape liability for the consequences of many acts connected with his business because done by another, for which he would be responsible if done by himself. He might delegate to persons pecuniarily irresponsible the care of large factories, of extensive mines, of ships at sea, or of railroad trains on land, and these persons, by the use of the extensive power thus committed to them, might inflict wanton and malicious injuries on third persons, without other restraint than that which springs from the imperfect execution of the criminal laws." (See pp. 15-16 of handout.)

As the Court found it foreseeable to Pep Line that a delivery person might violently harm a customer in the course of employment, it must also have been foreseeable to George's Radio that those persons delivering merchandise to customers' homes might get into altercations with customers over the terms of the delivery and inflict harm on them. If courts allow companies like George's Radio to escape tort liability by contracting with a third party to do the work, doesn't this create an incentive for companies to "contract out" all their delivery and repair personnel, without screening those contractors thought likely to hire "shady" workers (such as Carey)?

Thanks for your help!

Rip responded:

What an observant reading of the opinion, and a great question as well! The simple, formalistic answer is that Pep Line rather than George’s employed the tortfeasor, Carey. Since respondeat superior liability depends on an employment relationship, that theory can only support liability against Pep Line.

But your point is well taken, and courts sometimes reject the independent contractor defense (referred to on p.18) for precisely the reason you suggest. However, those cases largely focus on two sorts of problems that don’t appear to have been part of this case. First, courts are concerned when someone knowingly hires an insolvent or underinsured independent contractor. If the arrangement seems designed to evade liability, courts will often overlook the formal structure of the contracts. Second, companies that participate in or direct the activities of the independent contractor are often held independently liable for their own negligence.

Always bear in mind that these doctrines are inherently manipulable. So if a court is worried that a company will escape liability, there is usually a doctrine available to close the gap (e.g., non-delegable duties, negligence, etc.)

I hope that is helpful.

Warm regards,

Rip