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November 27th, 2023
In Coryell v. Morris, 2023 PA Super 232 (2023), the Superior Court of Pennsylvania held that franchisor Domino’s Pizza was not vicariously liable for the conduct of the franchisee’s delivery driver.
Domino’s entered into a Franchise Agreement under which Robizza, Inc., through its owner, Dawson, was to operate a store in Pennsylvania. The Agreement authorized Robizza to operate under Domino’s name, marks, trade dress, and logos and specified operating and product standards for the Store. Robizza was required to comply with the terms and conditions of the Agreement, and product and operating standards, i.e.:
Morris was working as a delivery driver for Robizza and driving a car leased by Dawson. While returning from a delivery, Morris collided with a motorcycle driven by Coryell, who was ejected and suffered substantial injuries. The Coryells filed an action raising claims of negligence and loss of consortium against Morris, Dawson, Robizza, and Domino’s, claiming that Domino’s was vicariously liable for Morris’s negligence. The parties stipulated that the Agreement was unambiguous, but disagreed as to how it should be construed. The trial court denied Domino’s motion for summary judgment, concluding that a question of fact existed concerning control over Morris.
At trial, the evidence demonstrated that no one from Domino’s instructed Dawson or the Robizza employees on how to meet or exceed Domino’s standards on a daily basis, and Dawson and his wife alone supervised Robizza’s employees. Dawson testified that Robizza was solely responsible for supervising and controlling the methods, means and details of the Store’s day-to-day operations. Robizza was also solely responsible for recruiting, hiring, training, scheduling, supervising, and paying all of its employees, and that Domino’s had no contractual right to supervise or direct Robizza’s employees. Moreover, Domino’s did not monitor the orders that Robizza accepted for delivery, which employees of Robizza were assigned for delivery, or the routes taken by Robizza’s employees to complete a delivery. Rather, Domino’s merely required that, at a minimum, Robizza take steps to ensure that its employees make all deliveries in compliance with all applicable laws and rules of the road and with due care and caution. Robizza was responsible for training and supervising its employees to meet or exceed that standard. He stated that the vehicle involved in the accident was leased to him individually and was operated by Morris with his permission. Domino’s never inspected, drove, or maintained that vehicle, nor did it train or test any of Robizza’s drivers.
Domino’s moved for compulsory nonsuit at the close of the Coryells’ evidence, reasserting that the trial court should determine vicarious liability as a matter of law. Again, however, the trial court denied the motion and submitted to the jury whether Domino’s should be held vicariously liable. The jury found that (1) Morris negligently caused the accident, (2) Domino’s was vicariously liable, and (3) Coryell sustained damages in the amount of $2,009,553 and that his wife was entitled to $100,000. Domino’s subsequently moved for JNOV. The trial court denied the motion and granted delay damages, bringing the total award to $2,337,279.14. After the trial court denied post-trial motions, it appealed to the Superior Court.
While ambiguous contracts are interpreted by the finder of fact, unambiguous contracts are interpreted by the trial court as a matter of law. Kripp v. Kripp, 849 A.2d 1159, 1163 (Pa. 2004). Accordingly, the Superior Court determined that trial court erred in not deciding the matter at summary judgment stage as a matter of law, and in submitting the question of Domino’s vicarious liability to the jury.
In Pennsylvania, a principal is liable to third parties for the frauds, deceits, concealments, misrepresentations, torts, negligent acts and other malfeasances of his agent, even though the principal did not authorize, justify, participate in or know of such conduct or even if he forbade the acts or disapproved of them, as long as they occurred within the agent’s scope of employment. Travelers Cas. & Sur. Co. v. Castegnaro, 772 A.2d 456, 460 (Pa. 2001). However, not all agents, though, are deemed “employees” or “servants.” Rather, “[a] principal and agent can be in the relationship of a master and servant, or simply in the status of two independent contractors.” Myszkowski v. Penn Stroud Hotel, Inc., 634 A.2d 622, 625 (Pa. Super. 1993). “If a particular agent is not a servant, the principal is not considered a master who may be held vicariously liable for the negligent acts of the agent.” Id. “[W]hether such person is subject to the alleged employer’s control or right to control with respect to his physical conduct in the performance of the services for which he was engaged. . . . The hallmark of an employee-employer relationship is that the employer not only controls the result of the work but has the right to direct the manner in which the work shall be accomplished; the hallmark of an independent contractee-contractor relationship is that the person engaged in the work has the exclusive control of the manner of performing it, being responsible only for the result. Green v. Independent Oil Co., 201 A.2d 207, 210 (Pa. 1964).
The Court reiterated that “daily control” of the franchisee’s operations remains necessary for the imposition of vicarious liability. Thus, even though a franchise agreement may have many requirements and standards for operating the store, that is not the type or degree of daily “control” necessary to support vicarious liability under the controlling case law in Pennsylvania. The Court determined that while Domino’s standards “touched” on delivery services, none of them gave Domino’s daily control over the manner in which those services were accomplished. Based on the facts, the Court determined that Robizza unmistakably had day-today control over employment matters, and that the Agreement suggested an independent contractor-contractee relationship rather than master-servant. Therefore, Domino’s could not be held vicariously liable for the negligence of Robizza’s employees.
The Coryell v. Morris, 2023 PA Super 232 (2023) opinion can be accessed here.
