My Employee Burned The Building Down!
                          Am I Liable?


     One  elderly man says to another, “Ben, sorry to hear  about
your  building  burning to the ground.”  The other  man  replies,
“Sam, please!  It’s next week!”.

     Lightning or other acts of God aside, fires generally  occur
because someone has been negligent or has intentionally sought to
cause harm.

     Why  should  you  as  an  employer be  responsible  for  the
negligence of your employee?  If a building burns down because of
some   negligent   act  on  the  part  of  one  your   employees,
particularly while you were home sleeping at the time, under what
theory should the building owner be privileged to look to you for
his recovery?

     As one treatise observes:

          “The losses caused by the torts of employees,
          which as a practical matter are sure to occur
          in  the conduct of the employer’s enterprise,
          are placed upon that enterprise itself, as  a
          required  cost of doing business.   They  are
          placed  upon  the  employer  because,  having
          engaged in an enterprise which will,  on  the
          basis  of  past experience, involve  harm  to
          others  through  the torts of employees,  and
          sought  to profit by it, it is just that  he,
          rather the innocent injured plaintiff, should
          bear  them; and because he is better able  to
          absorb  them, and to distribute them, through
          prices, rates or liability insurance  to  the
          public,  and so to shift them to society,  to
          the community at large.”

     In  one  case which reached the Supreme Court of California,
the  plaintiff’s  entire household furnishings and  effects  were
destroyed  by  a  fire while in the possession of  Bekins  Van  &
Storage  Co.   Evidence at trial was admitted at trial  that  the
fire  was caused by careless smoking.  Bekins contended  that  it
should  be  liable  for  careless smoking  only  if  the  company
permitted  smoking in places likely to create  a  hazard  to  the
stored goods or retained under employment known violators of  its
rule  against smoking.  Notwithstanding the imaginative arguments
of  its counsel, Bekins was held liable for the damages sustained
by  the plaintiff which arose out of the negligent smoking of its
employee.
     As  an  aside,  it is interesting to note that  the  Supreme
Court  reduced the trial court’s award from $3,126.15 to $501.40.
Of  such  monetary  weight  were the matters  which  reached  the
California Supreme Court in 1949!

     What  if  the Bekins employee had intentionally started  the
fire?  Would Bekins still be liable?

     In a matter of more recent vintage, this very question arose
when  a  security  company  was sued  because  a  security  guard
employee  intentionally  set fire to the  very  building  he  was
charged with guarding.

     The  court  noted the standard rule of law that an  employer
may be held vicariously liable for torts committed by an employee
within  the  scope of employment, but noted that the  intentional
act  of  attempting to burn the building down was not within  the
security guard’s scope of employment.

     An  employer can, however, be held liable for an  employee’s
intentional misconduct if the employee commits the act within the
scope  of  his  employment.  When do we know  the  act  has  been
committed  within  this  so-called “scope  of  employment?”   The
answer is best found within illustrations.

     A  guard  or “bouncer” charged with maintaining order  at  a
nightclub  is,  for  example, acting  within  the  scope  of  his
employment in ejecting or manhandling a troublesome patron.

     Another  illustration  of employer  liability  for  employee
intentional  misconduct is in the arena of business transactions.
It  is  the employer who will also be called upon to pay  damages
when  his  agent fraudulently misrepresents that which  is  being
sold,  e.g., the coin laundry grosses $40,000 per month  when  in
fact $8,000 per month is closer to the truth!

     The  moral of the story?  The person you hire as an employee
can   bring   you  misfortune  as  well  as  fortune!   Interview
carefully!

[This column is intended to provide general information only  and
is  not intended to provide specific legal advice; if you have  a
specific  question  regarding the  law,  you  should  contact  an
attorney  of your choice.  Suggestions for topics to be discussed
in this column are welcome.]


Reprinted from New Era Magazine
Myles M. Mattenson © 2000-2002