Vicarious Liability – Company Car (Respondeat Superior)

Vicarious Liability – Company

This is the second part of a series discussing vicarious liability; in particular, how it relates to the relationship between employers and employees. The respondeat superior doctrine makes an employer responsible for torts caused by their employees or others considered agents while operating within the scope of duties of their employment. Essentially, the employee is acting on behalf of the employer when the employer has control, or a right to control the employee’s actions. Another consideration is whether the employee’s actions intended to serve the interests of the employer. The vicarious liability of an employer is considered secondary and is limited to the extent of the employee’s liability.

Commercial Driver & Leased Vehicles: Placard (Logo) Liability

Placard or logo liability is an older doctrine that assumes a motor carrier is responsible for vehicles that are traveling with their identification number from the Department of Transportation (DOT), company name or logo. Commercial motor vehicles in the U.S. must post their DOT “placard” on both sides of their vehicles visible from fifty feet. Placard liability is not recognized in Colorado. Today, the term “lease liability” is used to describe liability when drivers are not traditional employees. Strict agency liability is the belief that a motor carrier is always liable for the negligent actions of leased drivers. Generally, vicarious liability is determined based on whether the driver was acting in their scope of employment (or service agreement) with the carrier.

Commercial Driver & Scope of Employment: Schell v. Navajo Freight Lines

Here, a trucker had a leasing agreement with Navajo Freight Lines for a commercial tractor-trailer. One day the driver failed to stop at a traffic signal, leading to an accident with injuries. The plaintiff brought a claim against Navajo based on respondeat superior. The court found that Navajo was liable, as the driver was operating at the time in service of Navajo’s interests. This served to effectively eliminate attempts by defendants claiming they had no responsibility for the negligence of independent contractors. Instead, the owner or operator of equipment on a lease is considered as an employee for these purposes.

Employer & Admission of Liability: Ferrer v. Okbamicael

In this Colorado Supreme Court case published on March 27, 2017, the Court confirmed that when an employer acknowledges liability for an employee under respondeat superior, all other direct claims of negligence are dismissed because, if not, the additional claims are simply “redundant and wasteful”. (The most commonly referenced case on this same topic is a 1995 case McHaffie v. Bunch.) Jessica Ferrer was crossing a street in Denver and was struck by a taxi that was driven by Okbamicael but owned by the Yellow Cab Co. Ferrer brought a claim against both Okbamicael and Yellow Cab under respondeat superior. In addition, she brought claims of negligent entrustment, hiring, supervising and more. Initially, Yellow Cab attempted an “independent contractor” defense, but later conceded to respondeat superior and the court granted their motion to then dismiss the other negligence claims.

Vicarious Liability & Contributory Negligence: Martin v. Silva

Here, the case of respondeat superior involves contributory negligence. Sergio Silva was operating a tractor-trailer doing business as Five Star Trucking that was pulling an oil container leased to him by Valley Equipment Leasing. Jennifer Martin was in a vehicle traveling eastbound and Lucille Francer was just ahead of her on Highway 6 when Silva (heading west) swerved and struck both vehicles. Martin filed a negligence claim against Silva, respondeat superior against Five Star, as well as negligent entrustment and respondeat superior against Valley. The jury determined that Francer was 20% at fault and that Silva, Five Star & Valley were 80% at fault, awarding Martin over $600,000 in damages.

New in Vicarious Liability Issues: Ride-Sharing Companies

With the emergence of ride-sharing companies such as Uber and Lyft, liability is a major concern. Uber has since implemented an insurance standard as follows:

  • When a driver is on-duty awaiting a call, provided coverage is $50,000 per person, $100,000 total liability, and $25,000 in property damage coverage.
  • When the driver is either traveling to pick up a passenger or has a passenger, coverage is $1 million in total liability coverage, which accounts for bodily injury and uninsured motorist. In addition, collision coverage is in place to repair the vehicle, regardless of fault, with a $1,000 deductible.
  • Driver partners must use their own insurance when operating for personal use.

Generally speaking, if an employee drives while working and causes an accident, it is quite likely the employer will be liable, if only in part. If a motorist, however, is not working while driving a company or leased car, then the employer will likely not be held accountable. It’s important to note that vicarious liability is not specific to car accidents and personal injuries, but to any case where an employee – during the course and scope of his or her employment – injures another person. In many of those cases, the employer may very well be vicariously liable. In the end, vicarious liability comes down to the facts, and knowing all the facts can make all the difference in a person’s claim for compensation.

Office Location

  • Denver
  • Arvada
  • Aurora
  • Boulder
  • Brighton
  • Colorado Springs
  • Lakewood
  • Westminster
  • Wheat Ridge

Put my knowledge and expertise to work for you. Contact my office today to discuss your case in a free consultation.