How Low Can You Go? (October Litigation Quarterly 2009)

Personal Liability of Employees of Commercial Property Owners

Plaintiffs sometimes allege personal liability against the employees of a commercial business following a slip and fall, or a criminal attack, that occurred on the business premises.  Frequently, this maneuver is simply an attempt to defeat diversity jurisdiction and the removal of the matter from state court to federal court.

However, in order to establish personal liability against an  employee, a significant burden must be met under Florida law to demonstrate that the  employee was either in sufficient control of the property to prevent the incident or was personally responsible for the negligent act giving rise to the injury.

It is well established Florida law that the “duty to protect others from injury resulting form a dangerous condition on premises” belongs to the party which has the “right to control access [to the premises] by third parties.”  Bovis v. 7-Eleven, Inc., 505 So. 2d 661 (Fla. 5th DCA 1987).  This right to control access to the premises belongs to the possessor of the premises; generally the owner or lessee of the property.  Id.  Thus, if a corporation is the party which possesses the right to control access to the premises, it is the corporation, not the corporation’s employees, which owes the duty to protect others from dangerous conditions that may be present on the premises.

For example, in Aguila v. Hilton, 878 So. 2d 392 (Fla. 1st DCA 2004), a woman was killed after an intoxicated college student left a hotel party and crashed into the woman’s vehicle.  The woman’s estate then sued the hotel for allowing an intoxicated person to leave their hotel.  Id.   The court held that a duty existed to those who “create” a risk to “either lessen the risk or see that sufficient precautions are taken to protect others from the harm that the risk poses.”  Id. at 396; citing McCain v. Florida Power Corporation, 593 So. 2d 500 (Fla. 1992). A duty does not exist unless the defendant both “created” the risk and “had the ability to avoid the risk.”  Id.at 396.   No duty exists on the part of the defendant to protect a third party from injury simply because the risk may have been foreseeable to the defendant.  Id.  Therefore, unless the defendant “created” the risk and was in a “position to control the risk” no duty to protect a third party exists.  Id.

Moreover, Florida law does not impose a duty on the possessor of commercial property, let alone an employee, to ensure the safety of business invitees.  Cassel v. Price,  396 So. 2d 258 (Fla. 1st DCA 1981); Aguila, 878 So. 2d at 395.  Florida law imposes two duties upon possessors of property to invitees upon their premises.  Cassel, 396 So. 2d at 264.  First, a land possessor must use reasonable care in maintaining his premises.  Id.  Second, the possessor must warn invitees of all hidden perils, which are known, or should be known, to the possessor.   Id. Thus, Florida law does not impose a duty upon employees to be the insurers of the safety of business invitees.  Imposing such a duty would cause the duty element of negligence to be “stretched totally out of shape.”  Aguila, 878 So. 2d at 395.  Such a duty would “impose an unreasonable and prohibitively burdensome duty” on possessors of land and their employees.  Cassel, 396 So. 2d at 265.

A corporation can only act through its officers, agents and employees.  Browning v. State, 133 So. 847 (Fla. 1931).  Officers, agents and employees of a corporation that possess the right to control the premises may be held personally liable to a third person if:

1)    The corporation owes a duty of care to the third person, breach of which has caused the damage for which recovery is sought.

The duty is delegated by the principle or employer to the defendant   officer.

The defendant officer has breached this duty through personal-as opposed to technical or vicarious-fault.

With regard to personal fault, personal liability cannot be imposed upon the officer simply because of his general administrative responsibility for performance of some function of his employment.  He must have a personal duty towards the injured third person, breach of which specifically has caused the person’s damages.

See McElveen v. Peeler, 544 So. 2d 270 (Fla. 1st DCA 1989).  Stated differently, most  employees do not have the right to control the premises.  A corporate officer or employee is not liable for the torts of the company simply because of the person’s position with the company. Vesta Construction and Design, L.L.C v. Lotspeich & Associates, Inc., 974 So. 2d 1176 (Fla. 5th DCA 2008); See also, Orlovsky v. Solid Surf, Inc., 405 So. 2d 1363, 1364 (Fla. 4th DCA 1981).

However, if an employee personally caused the incident, this breach of duty is personal, and the employee can be held individually liable.  Orlovsky v. Solid Surf, Inc., supra.  In Orlovsky, the owner of a skate park personally rented defective skateboards that caused injury to an invitee.  The court held the owner and possessor of the premises personally participated in the tort by personally renting defective equipment.  Id. Therefore he was properly a party, individually, to the suit. Indeed, officers or agents of corporations may be individually liable in tort if they commit or participate in a tort, even if their acts are within the course and scope of their employment.   White v. Wal-Mart Stores, Inc., 918 So. 2d 357 (Fla. 1st DCA 2006); See also McElveen v. Peeler, supra; White-Wilson Med. Ctr. v. Dayta Consultants, Inc., 486 So. 2d 659, 661 (Fla. 1st DCA 1986).

In order to establish liability of an individual employee, the complaining party must allege and prove that the employee owed a duty to the complaining party, and that the duty was breached through personal (as opposed to technical or vicarious) fault. White, 918 So. 2d at 357;  McElveen, 544 So.2d at 272. In White, the court specifically noted that an officer or employee may not be held personally liable “simply because of his general administrative responsibility for performance of some function of his [or her] employment.”  He or she must be actively negligent.  If a complaint alleges more than mere technical or vicarious fault, such as the employee being directly responsible for carrying out certain responsibilities and that he or she negligently failed to do so, and that resulted in injury to a plaintiff, then such allegations may be legally sufficient to withstand a motion to dismiss for failure to state a cause of action.

As stated at the outset, naming an employee as an individual defendant is usually a tactic used to avoid removal of a state court case to federal court. The employee is usually a citizen of the State, whereas the corporate defendant many times is not.  This defeats federal jurisdiction  under diversity of citizenship jurisdiction.  This tactic is also referred to as fraudulent joinder. For example, in Pritchard v. Wal-Mart Stores, Inc., WL 580425 (M.D. Fla. 2009), consumers bought a contaminated jar of peanut butter from the Wal-Mart (an Arkansas defendant), but could not subsequently establish that a store manager (a Florida defendant) was directly and personally at fault. Accordingly, the court held that the manager had been fraudulently joined as a defendant in order to defeat diversity jurisdiction. The Pritchard court reiterated the standard for determining the liability of an employee of a corporation as noted in White, supra, as follows:

“Officers or agents of corporations may be individually liable in tort if they commit or participate in a tort, even if their acts are within the course and scope of their employment. However, to establish liability, the complaining party must allege and prove that the officer or agent owed a duty to the complaining party, and that the duty was breached through personal (as opposed to technical or vicarious) fault.... [A]n officer or agent may not be held personally liable simply because of his general administrative responsibility for performance of some function of his [or her] employment-he or she must be actively negligent”

In Pritchard, supra, Wal-Mart argued that since the plaintiffs could not establish that the store manager was personally at fault for the plaintiffs’ injuries in any way, he had been fraudulently joined as a defendant in the lawsuit.  The court agreed. Indeed, the court noted that there was no evidence to support the plaintiffs’ claim that the manager was actively negligent, and therefore, the store manager was found to have been fraudulently joined, and the case remained in Federal Court.

However, in Allen v. Monsanto Co., 2009 WL 426546 (N.D. Fla. 2009) after a plaintiff filed a motion to remand a cause of action back to state court and the  defendant opposed the motion claiming that the individually named plant manager was fraudulently joined, the court ultimately found that under Florida law the plant manager was in sufficient control of the plant and had a duty to lessen the risk of injury to the plaintiff, thus making the manager a proper party. In so holding, the court did recognize “[a] defendant’s right to removal cannot be defeated by a fraudulent joinder of a residential defendant having no real connection to the controversy.” Id. See also Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97 (1921). See also Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir. 1997).

In conclusion, for those cases where a low level manager or store employees, are named individually, one must look to why the individual is being named.  If it is to defeat diversity jurisdiction and possible removal to federal court, the matter still may be removed on the basis that the non-diverse employee has been “fraudulently joined” to the action.  Only in those cases where the employee possesses the requisite control over the property, or is alleged to have actively engaged in some conduct that is the cause of the claimant’s harm will the federal courts find that a proper cause of action has been stated against the individual employee, and remand the matter back to state court.