The Appellate Court of New Jersey recently reversed a verdict as to liability in Lau v. Seabring Associates and found that the apartment complex-defendant was not liable under a theory of Social Host Liability based upon respondeat superior. Previously, at trial, a verdict for $7.4 million dollars was reached and almost entirely allocated against the apartment complex.
The causes of action against Seabring Associates were premised on allegations that their employee, a front-desk concierge at their high-rise apartment complex, allowed outside guests to attend an after-hours pool party on the premises. The employee let party-goers enter the building, left the door to the pool unlocked, and permitted the consumption of alcoholic beverages despite a no-drinking policy at the pool. One of the intoxicated party-goers left in his vehicle and struck the plaintiff, causing severe injuries.
The plaintiff argued that Seabring Associates should be vicariously liable through the theory of respondeat superior since the employee was working for them at the time he permitted the pool party. However, the Appellate Court found that the employee’s decision to admit trespassers to an unapproved pool party was clearly outside the scope of his employment as it “directly undermined the security of the building that he was hired to provide.” The Appellate Court also found that Seabring Associates was not a social host – it was an employer – and, therefore, a stand-alone charge on a social host theory of liability was improper.
Social Host Liability is codified in N.J.S.A. 2A:15-5.5 to 5.8. The Statute provides the “exclusive civil remedy for personal injury or property damage resulting from the negligent provision of alcoholic beverages by a social host to a person who has attained the legal age to purchase and consume alcoholic beverages.” A Plaintiff who has sustained bodily injury or injury to real property may only recover under this Statute when:
1. the social host willfully and knowingly provided alcoholic beverages either:
a. to a person who was visibly intoxicated in the social host’s presence; or
b. to a person who was visibly intoxicated under circumstances manifesting reckless disregard of the consequences as affecting the life or property of another; and
the social host provided alcoholic beverages to the visibly intoxicated person under circumstances which created an unreasonable risk of foreseeable harm to the life or property of
another, and the social host failed to exercise reasonable care and diligence to avoid the foreseeable risk; and
3. the injury arose out of an accident caused by the negligent operation of a vehicle by the visibly intoxicated person who was provided alcoholic beverages by a social host.
The term “provided” above has been applied to cases involving “self service” by guests as well as the “direct service” of alcoholic beverages by the social host while on his or her property. “Provided” also applies to alcoholic beverages which may have been brought by other guests.
Keep in mind, though, that serving alcohol to an under-aged person is governed by traditional negligence. Dower v. Gamba, 276 N.J. Super. 319, 328 (App. Div. 1994), certif. denied, 140 N.J. 276 (1995).
The Appellate Court found that Seabring Associates was not a social host. They did not sponsor or condone the pool party, nor was there evidence to suggest that they provided the alcoholic beverages. There was also no evidence to suggest that their employee provided alcoholic beverages. In that regard, the Appellate Court noted that imposing liability on Seabring Associates was dependent on a finding of respondeat superior, which they determined was not established because there was no evidence that their employee was seeking to further Seabring Associates’ interests by his conduct on the night in question.
The theory of respondeat superior is founded upon the employer-employee relationship and allows liability to be established against the employer for the actions of its employee. It must be found, however, that the tortious act occurred within the scope of the employee’s employment and in furtherance of the employer’s interests. This is a distinct theory of liability from whether the employer is subject to direct liability and is not invoked just because of an employer-employee relationship. It is also a fact based question that is required to be submitted to the jury.
In determining whether respondeat superior is applicable, the scope of the employee’s employment must be evaluated. The Appellate Court referred to four factors to support a finding that an employee’s act is within the scope of his employment:
1. it is of the kind he is employed to perform;
2. it occurs substantially within the authorized time and space limits;
3. it is actuated, at least in part, by a purpose to serve the employer; and
4. if force is intentionally used by the employee against another, the use of force is not unexpected by the employer.
On the contrary, an employee’s act is outside the scope of his employment if it is different in kind from that authorized, far beyond the authorized time or space limits, or too little actuated by a purpose to serve the employer.
In Lau, the Court found that respondeat superior did not apply under the circumstances. The employee allowed trespassers to enter his employer’s property and permitted a party in an otherwise-locked and restricted pool. He also allowed alcoholic beverages to be consumed while he watched the party through a camera system at the front desk to ensure that the party-goers were not disturbed. The Appellate Court found that these acts were not only inconsistent with Seabring Associates’ purpose in employing him, but they also directly undermined the security of the building that he was hired to provide.
The take-away for an apartment complex is simple: the employer-employee relationship does not automatically give rise to liability on a theory of respondeat superior. As a result, if an employee commits an act, or permits an act that is so far removed from the purposes of his or her employment, liability will not be imposed on the employer. This recent case also provides a reminder of the potential for liability when acting as a social host, not only for an apartment complex, but for business owners and homeowners as well. Be careful.
By Joseph C. Megariotis, Esq.