Title: Hamilton v. Natrona County Educ. Ass'n

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Hamilton v. Natrona County Educ. Ass'n1995 WY 126901 P.2d 381Case Number: 94-135Decided: 08/08/1995Supreme Court of Wyoming
Carey 
HAMILTON, and Mel Hamilton, individually and in his capacity as next friend of 
Derek Hamilton and Zella Hamilton, minors; and Malik Hamilton, 

Appellants 
(Plaintiffs),

v.

NATRONA 
COUNTY EDUCATION ASSOCIATION, an unincorporated 
association,

 Appellee (Defendant).

Patrick 
Dixon of Dixon & Despain, Casper, for appellants.

Rex 
O. Arney and Todd H. Hambrick of Murane & Bostwick, Casper, for 
appellee.

Before 
GOLDEN, C.J., and THOMAS, MACY, TAYLOR and LEHMAN, JJ.

GOLDEN, 
Chief Justice.

[¶1]      Appellant Carey 
Hamilton (Carey) and members of her family (Hamiltons) filed a suit against 
appellee Natrona County Education Association (NCEA) to recover damages for 
injuries Carey suffered at a party given by the president of NCEA. Concluding 
NCEA owed no duty of care to Carey and her family members and no legal basis for 
liability existed, the district court granted summary judgment to NCEA and the 
Hamiltons appeal.

[¶2]  We affirm.

[¶3]  The Hamiltons present these 
issues:

A. 
Was Davis acting within the scope of her authority in organizing and hosting the 
party, so as to impose vicarious liability on the NCEA?

B. 
Should Wyoming adopt the theory of enterprise liability so as to hold the NCEA 
legally responsible for this activity?

C. 
Should the doctrine of apparent authority be applied to extend liability to the 
NCEA?

D. 
Did there exist genuine issues of material fact which prevented summary 
judgment?

[¶4]  NCEA presents only one 
issue:

1. 
Did the trial court err by determining that the NCEA had no duty?

FACTS

[¶5]      NCEA, a private 
non-profit corporation, is a voluntary association of classroom teachers located 
within the Natrona County School District. Affiliated with state and national 
organizations, it provides contract negotiations, grievance representation, 
lobbying, and other support for its members. NCEA also has a social committee 
headed by a chairperson which occasionally sponsors social 
functions.

[¶6]      In June of 1992, 
Nancy Duitscher Davis (Duitscher) and Rodney L. Davis (Davis), then dating, but 
now married, held an outdoor party at Davis' home in Evansville, Wyoming. 
Duitscher, the president of NCEA, and Davis, a county extension agent, each 
extended invitations to co-workers, friends, and neighbors. Duitscher prepared a 
written invitation addressed to "old and new NCEA Executive Board members" 
(Board). During the party, the elevated deck attached to the Davis home 
collapsed. At the time of the collapse, about ten or twelve people were on it, 
including Carey Hamilton, who fell more than eight feet and sustained a 
fractured vertebrae and other injuries.

[¶7]      Carey's husband, 
Mel, had been elected to the Board, his term just beginning that June. Duitscher 
had called Mel during business hours at the school where he taught and told him 
the "board members were going to get together." During that call, Mel expressed 
interest to Duitscher in attending a social function, which would permit him to 
speak to the board member, Karla Downing, whom he was replacing. Carey and Mel 
attended the party believing it to be an NCEA function. Of the thirty-five other 
people who attended the party, only five were current or former members of the 
Board. Seventeen of the guests were Davis' co-workers and their 
families.

[¶8]      On September 28, 
1993, Carey and her family members filed a negligence suit against NCEA, 
claiming NCEA, "as sponsor, promoter, organizer and host of this business/social 
function owed a duty of care to its invitees". The Hamiltons claimed the duty 
had been breached by NCEA's failure to inspect the premises or warn of the 
defective deck and such negligence had caused personal injury, emotional 
distress and loss of consortium damages. NCEA moved for summary judgment, 
asserting no material issues of fact existed as to whether NCEA had sponsored or 
authorized the party because it was Duitscher's private party, NCEA had not 
requested, approved, or paid for any of it, and therefore, as a matter of law, 
no duty was owed to Carey by NCEA. The Hamiltons claimed material questions of 
fact existed concerning whether NCEA was directly liable because it had 
sponsored the party or whether NCEA was vicariously liable under either 
respondeat superior, enterprise liability, or apparent authority theories 
precluding summary judgment. The district court granted NCEA's motion for 
summary judgment and this appeal followed.

STANDARD 
OF REVIEW

[¶9]      Summary judgment 
will be sustained only if there is no genuine issue of material fact and the 
prevailing party is entitled to judgment as a matter of law. Lyden v. Winer, 878 P.2d 516, 518 (Wyo. 1994). A material fact is one that establishes or refutes an 
essential element of a cause of action or a defense asserted by a party. Lyden, 
878 P.2d  at 518. If the moving party presents supporting summary judgment 
materials demonstrating no genuine issue of material fact exists, the burden is 
shifted to the non-moving party to present appropriate supporting materials 
posing a genuine issue of a material fact for trial. Downen v. Sinclair Oil 
Corp., 887 P.2d 515, 519 (Wyo. 1994). On appeal, this court examines the entire 
record in the light most favorable to the party who opposed the motion, 
affording to that party all favorable inferences which may be drawn from the 
materials either supporting or opposing the motion. Lyden, 878 P.2d  at 518. If a 
dispute exists over a material fact which leads to conflicting interpretations 
or if reasonable minds might differ, then summary judgment is improper. Lyden, 
878 P.2d  at 518.

DISCUSSION

Direct 
Liability-Duty

[¶10]   While usually duty is a question of 
law, Hamiltons assert duty springs from the relationship between the parties and 
when that relationship is in dispute, duty is a question of fact precluding 
summary judgment. Until the jury determines the specific issue as to whether the 
NCEA sponsored the June 6, 1992, party or whether it was a private party hosted 
by Davis, they reason it was error to grant summary judgment.

[¶11]   In stating a cause of action for 
negligence, the complaint must allege the defendant owed a duty to the 
plaintiff, the defendant breached that duty, and the plaintiff's injury was 
proximately caused by the breach. Downen, 887 P.2d  at 520. "Essential to any 
negligence cause of action is proof of facts which impose a duty upon defendant. 
The question of the existence of a duty is a matter of law for the court to 
decide." Goodrich v. Seamands, 870 P.2d 1061, 1064 (Wyo. 1994), citing ABC 
Builders, Inc. v. Phillips, 632 P.2d 925, 931-32 (Wyo. 1981). A duty may arise 
by contract, statute, common law, or when the relationship of the parties is 
such that the law imposes an obligation on the defendant to act reasonably for 
the protection of the plaintiff. Goodrich, 870 P.2d  at 1064; Caterpillar Tractor 
Co. v. Donahue, 674 P.2d 1276, 1280 (Wyo. 1983).

[¶12]   In moving for summary judgment, 
NCEA provided affidavits and minutes of NCEA executive board meetings indicating 
NCEA did not approve, plan for, or pay for any part of the party. The written 
invitation was addressed as from "Rod and I" and made no claim the party was an 
NCEA function. The party was held at a nonmember's home who testified it was his 
and Duitscher's private party for the couple's friends, neighbors, and 
associates. Duitscher also testified it was a private party.

[¶13]   In response, the Hamiltons provided 
no evidence directly disputing the facts presented, but instead, pointing to the 
NCEA bylaws directing the president "shall have the responsibility of 
maintaining good rapport with the membership", they contend it can be inferred 
Duitscher was acting for the NCEA. Their specific evidence supporting the 
inference is provided by an affidavit testifying a party was discussed at an 
NCEA meeting followed shortly afterwards by Duitscher's invitations addressed to 
"board members". Further, they say Duitscher used the school mail system 
authorized for NCEA use and listed her office phone number for responses, 
actions more suited to an NCEA social function rather than a private 
party.

[¶14]  WYO. RULE OF CIV.PROC. 56(e) 
states:

When 
a motion for summary judgment is made and supported as provided in this rule an 
adverse party may not rest upon the mere allegations or denials of the adverse 
party's pleading, but the adverse party's response, by affidavits or as 
otherwise provided in this rule, must set forth specific facts showing that 
there is a genuine issue for trial. If the adverse party does not so respond, 
summary judgment, if appropriate, shall be entered against the adverse 
party.

See 
also Downen, 887 P.2d  at 519.

[¶15]   The specific facts provided by the 
Hamiltons raise a genuine issue of fact as to whether NCEA sponsored the party 
only if Duitscher, as president, acted for the NCEA. Under NCEA's organizational 
bylaws, the president does have prime responsibility for good rapport; however, 
only the executive board can approve expenditures for NCEA activities. That the 
board did not approve any payment for the party is undisputed. NCEA also had a 
social committee for those functions which were NCEA-sponsored and that the 
committee was not involved in organizing this party is undisputed. Also 
undisputed is that the school mail was frequently used for personal mail and the 
Hamiltons provide no evidence Duitscher was not permitted to accept personal 
phone calls at her office number. Her home phone number was also listed on the 
invitation.

[¶16]   Without specific facts disputing 
evidence that NCEA took no action to authorize a party, the only reasonable 
inference to be drawn is that NCEA did not approve or sponsor the party. Without 
evidence NCEA took action to sponsor the party, a duty on its part did not 
arise. Without such a duty, NCEA cannot be liable to Duitscher's guest on a 
negligence theory. The district court appropriately granted summary judgment on 
this issue.

Vicarious 
Liability

[¶17]   Hamiltons claim NCEA is vicariously 
liable for Duitscher's negligence under the doctrines of respondeat superior, 
apparent authority or enterprise liability. Under the first two theories, an 
organization is liable for the tortious conduct of its officers, agents or 
employees acting within the actual or apparent scope of their authority or scope 
of their employment. Enterprise liability is not recognized in 
Wyoming.

1. 
Respondeat Superior

[¶18]   Under the respondeat superior 
theory, an employer will be held liable for the negligence of an employee who is 
acting within the scope of employment. Combined Ins. Co. of America v. Sinclair, 
584 P.2d 1034, 1042 (Wyo. 1978). Assuming Duitscher negligently acted regarding 
the defective deck and her negligence proximately caused the injury, her 
negligent act must have been within the scope of employment to hold NCEA 
liable.

[¶19]   In Miller v. Reiman-Wuerth Co., 598 P.2d 20 (Wyo. 1979), we said conduct of an employee is within the scope of 
employment only if it is of the kind he is employed to perform; it occurs 
substantially within the authorized time and space limits; and it is actuated, 
at least in part, by a purpose to serve the master. Miller, 598 P.2d  at 22, 
quoting § 228 of the RESTATEMENT (SECOND) OF AGENCY (1958). Hamiltons assert a 
jury might determine Duitscher was acting to benefit her employer based upon the 
discussion at an NCEA meeting about a party, Duitscher's addressing written 
invitations to NCEA board members, and Duitscher's listing of her office 
telephone number on the invitation. Hamiltons claim this issue is a question of 
fact for the jury.

[¶20]   The determination of the definition 
of scope of employment or the standard under which it is ascertained is a 
question of law for the court. Miller, 598 P.2d  at 23. Generally, the 
determination as to whether or not one is acting within the scope of employment 
is a question of fact for the jury, but it becomes a question of law when but 
one reasonable inference can be drawn. Miller, 598 P.2d  at 23.

[¶21]   NCEA's specific evidence that 
Duitscher had no intention other than personal is not disputed by the Hamiltons' 
evidence of tenuous connections to NCEA. Nebulous connections do not raise an 
issue of fact as to whether Duitscher's actions were in any way motivated by a 
purpose to serve her employer. The only legal conclusion to be drawn from the 
undisputed facts is that Duitscher's actions were solely personal and, 
therefore, outside the definition of the scope of employment.

2. 
Apparent Agency Rule

[¶22]   In Sharsmith v. Hill, 764 P.2d 667 
(Wyo. 1988), this court held that application of the apparent agency rule was 
appropriate in a negligence action to impose vicarious liability against a 
hospital. Sharsmith, 764 P.2d  at 672. The Hamiltons claim apparent agency also 
imposes vicarious liability against NCEA in this negligence action. NCEA does 
not oppose this extension of Sharsmith, but asserts the apparent agency rule 
does not apply to this case because action on the part of the principal is 
required and there was none in this case.

[¶23]  Sharsmith approved § 267 of the 
RESTATEMENT (SECOND) OF AGENCY (1958) which states:

"One 
who represents that another is his servant or other agent and thereby causes a 
third person justifiably to rely upon the care or skill of such apparent agent 
is subject to liability to the third person for harm caused by the lack of care 
or skill of the one appearing to be a servant or other agent as if he were 
such."

Sharsmith, 
764 P.2d  at 672.

[¶24]   A legal entity such as NCEA can act 
only through its agents, and when its agents act within the scope of their 
authority, their actions are the actions of the organization. See Mauch v. 
Kissling, 56 Wn. App. 312, 783 P.2d 601, 604 (1989). An agent may possess actual 
or apparent authority and either type of authority may serve to bind the 
principal, but there must be evidence the principal had knowledge of the act 
which was being committed by its agent. See Cargill, Inc. v. Mountain Cement 
Company, 891 P.2d 57, 62 (Wyo. 1995)

[¶25]   Whether an agency relationship 
exists and the scope of the agent's authority are questions of fact. Cargill, 
891 P.2d  at 62. If evidence is not presented creating a question of fact, then 
determinations are made as a matter of law. See Mauch, 783 P.2d  at 
605.

[¶26]   In Cargill, this court defined a 
test for traditional apparent agency, which closely followed § 27 of the AGENCY 
RESTATEMENTS.1 RESTATEMENT (SECOND) OF AGENCY § 
267 is a special rule, however, which requires actual reliance upon the 
representations of the principal by the person injured. Such a causal 
relationship and such a change of position are the essence of estoppel to deny 
agency. Jackson v. Power, 743 P.2d 1376, 1380-81 (Alaska 1987). All of the 
Hamiltons' arguments state that, given Duitscher's position and actions, it was 
reasonable for them to believe NCEA was sponsoring the function. However, the 
conduct in question which causes reliance must be NCEA's, not Duitscher's or 
Hamilton's. As already discussed, NCEA made no representations which could have 
caused reliance by the Hamiltons.

[¶27]   The Hamiltons provide authority 
that each of the following factors can serve as a representation by a principal 
that apparent agency exists:

1) 
the acts are of a high level corporate official; or

2) 
the continuity of an agent's acts make it reasonable to infer authority; 
or

3) 
the principal subsequently acquiesces in the actions of the agent.

[¶28]   However, under Sharsmith, these 
factors cannot be considered absent evidence that the principal manifested 
consent to the exercise of authority or has knowingly permitted the agent to 
exercise such authority. There is no evidence in this case NCEA consented to or 
permitted Duitscher to represent to anyone the party was an NCEA function. The 
evidence reveals only that Duitscher acted with her friend alone in planning, 
organizing, and having a private party, without any participation in any way by 
any other member of NCEA. Duitscher did not have the apparent authority to 
extend liability to NCEA for the accident. See Sharsmith, 764 P.2d  at 672. 

3. 
Enterprise Liability.

[¶29]   The Hamiltons contend their belief 
the party was an NCEA function warrants application of the enterprise liability 
theory and they recommend this court adopt the rule that an enterprise should be 
held liable if the enterprise impacts society and the negligent act occurred 
during an activity performed for the benefit or in the interest of the 
enterprise. In reply, NCEA contends the theory is an extension of respondeat 
superior carried to an extreme degree which is generally rejected in judicial 
opinions for policy reasons.

[¶30]   The rationale for the enterprise 
liability theory was explained in Sandman v. Hagan, 261 Iowa 560, 154 N.W.2d 113 
(1967):

[T]he 
so-called modern trend [is] to find liability in this class of cases on the 
basis that such wrongs are committed by the employee only because of the 
employment situation, and that since the employer has the benefit of the 
enterprise as between two innocent third parties, he is better able to bear the 
risk of loss. If he cannot altogether avoid such wrongs, he can at least 
minimize them. In those cases it is argued that a general sense of fairness 
requires that the employer, as the person interested and benefitted by the 
business, rather than the persons who have no concern in or control over it, 
should bear the burden of such wrongs as incidental to such 
business.

Sandman, 
154 N.W.2d  at 118-19.

[¶31]   Courts generally "decline to impose 
a rule, the ramifications of which would be far-reaching and which would 
rearrange, across the state, the responsibility of employers for the conduct of 
their employees. Such a redirection of social policy is, more appropriately, the 
function of the legislature." Kuehn v. White, 24 Wn. App. 274, 600 P.2d 679, 683 
(1979). We agree with this rationale and reject the theory of enterprise 
liability.

CONCLUSION

[¶32]   The district court correctly 
determined no genuine issues of material fact existed on issues of direct or 
vicarious liability and summary judgment was appropriate as a matter of 
law.

[¶33]  Affirmed.

Footnotes

1 
In Cargill, this court held that apparent authority will be determined according 
to a two-prong test which closely correlates with RESTATEMENT (SECOND) OF AGENCY 
§ 27:

To 
recover on [the apparent authority theory] the third party must establish two 
facts: (1) the principal was responsible for the appearance of authority in the 
agent to conduct the transaction in question . . . and (2) the third party 
reasonably relied on the representations of the agent.

Cargill, 
891 P.2d  at 62, quoting Herbert Const. Co. v. Continental Ins. Co., 931 F.2d 989, 993-94 (2nd Cir. 1991) (citations omitted).

RESTATEMENT 
(SECOND) OF AGENCY § 27 (1958) states:

. 
. . apparent authority to do an act is created as to a third person by written 
or spoken words or any other conduct of the principal which, reasonably 
interpreted, causes the third person to believe that the principal consents to 
have the act done on his behalf by the person purporting to act for 
him.