Case Name: Teri Harvey LITTLE and Frank Donald Little, Jr., Plaintiffs, v. OMEGA MEATS I, INC., Thomas A. Cassano, and Ronald Lee Smith, Defendants.
Court: Court of Appeals of North Carolina
Jurisdiction: North Carolina
Decision Date: 2005-07-19
Citations: 615 S.E.2d 45
Docket Number: No. COA04-154.
Parties: Teri Harvey LITTLE and Frank Donald Little, Jr., Plaintiffs,
v.
OMEGA MEATS I, INC., Thomas A. Cassano, and Ronald Lee Smith, Defendants.
Judges: 
Reporter: South Eastern Reporter 2d
Volume: 615
Pages: 45–45

Head Matter:
Teri Harvey LITTLE and Frank Donald Little, Jr., Plaintiffs,
v.
OMEGA MEATS I, INC., Thomas A. Cassano, and Ronald Lee Smith, Defendants.
No. COA04-154.
Court of Appeals of North Carolina.
July 19, 2005.
Appeal by plaintiffs from judgment entered 20 August 2003 by Judge Michael E. Helms in Guilford County Superior Court. Heard in the Court of Appeals 22 September 2004.
Schoch and Schoch by Arch K. Schoch IV and Arch K. Schoch V, High Point, for plaintiff-appellants.
Horton and Gsteiger, P.L.L.C. by Urs R. Gsteiger, Winston-Salem, for defendant-appellees.

Opinion:
STEELMAN, Judge.
Plaintiffs Frank and Teri Little resided in a single-family residence in the City of Greensboro. About midday on 23 March 2001, Frank was at work and Teri had left the residence to take a walk in a nearby neighborhood. While the Littles were gone from their residence, defendant Smith (Smith) drove into the Littles' neighborhood, operating a refrigerated Omega Meats truck. Smith parked the truck in the driveway of the Littles' next door neighbor, and proceeded to break into the side entrance of the Littles' residence. While Smith was still inside, Teri returned to the home and went inside. She was attacked by Smith, handcuffed and robbed. Approximately twenty to thirty minutes later, Frank also returned home. Smith then further assaulted Teri, bound Frank, and attempted to asphyxiate him with a plastic bag. As Smith began to sexually assault Teri, Frank freed himself and grabbed a knife. A struggle ensued over the knife, during which Teri was able to flee from the home. Realizing that one of his victims had escaped, Smith fled from the Littles' residence and drove off in the Omega Meats truck. Smith was subsequently convicted of several counts of kidnapping, felony assault, robbery, and felonious breaking and entering. See State v. Smith, 160 N.C.App. 107, 584 S.E.2d 830 (2003).
Defendant Omega Meats I, Inc. (Omega) sells meat products using independent contractor salesmen. Defendant Thomas A. Cassano (Cassano) is the president of Omega. Salesmen rent refrigerated trucks from Omega on a daily basis, and attempt to sell consigned meats to customers, door to door. At the end of the day, the salesman pays Omega for the truck rental, and for any meat sold. Once a salesman leaves Omega's warehouse, he is not supervised or controlled by Omega. Each salesman develops his own customers and decides where to drive the truck to service his existing customers or attempt to acquire new customers.
Smith first worked for Omega in 1997. Prior to beginning work as an independent contractor salesman, Omega performed a driver's license check on Smith, but did not perform a criminal background check. Had a criminal background check been performed, it would have revealed that Smith had numerous convictions, including drug offenses and assault. During his first period as a salesman for Omega, Smith was convicted of common law robbery and kidnapping, and served an active prison sentence of 26 months. Following Smith's release from prison, he went back to work for Omega as an independent contractor salesman. It was during Smith's second term with Omega that the incident with the Littles occurred.
This action was initiated on 21 February 2002, seeking damages for personal injury and punitive damages from defendants Omega, Cassano and Smith arising out of the events of 23 March 2001. The claims against Omega and Cassano were for negligent hiring and retention of Smith as a salesman. This matter came on for trial before the Honorable Michael E. Helms and a jury at the 11 August 2003 session of Civil Superior Court for Guilford County. The plaintiffs' claims against Omega and Cassano were severed from the claims against Smith, and only the claims against Omega and Cassano were tried before Judge Helms. At the conclusion of the plaintiffs' evidence, defendants Omega and Cassano moved for a directed verdict pursuant to Rule 50(a) of the North Carolina Rules of Civil Procedure. This motion was granted, and the trial court dismissed plaintiffs' claims against Omega and Cassano. The trial court certified its judgment pursuant to Rule 54(b) for immediate appeal. Plaintiffs appeal.
In plaintiffs' sole assignment of error they argue that the trial court erred in directing verdict in favor of defendants Omega and Cassano because the evidence presented was sufficient for the case to be submitted to the jury on the issue of defendants' negligence in hiring and retaining Smith. We disagree.
A motion for directed verdict under G.S. 1A-1, Rule 50(a) tests the legal sufficiency of the evidence to take the case to the jury.
In ruling on a defendant's motion for directed verdict, the trial court must take plaintiff's evidence as true, considering plaintiff's evidence in the light most favorable to him and giving him the benefit of every reasonable inference. Defendant's motion for a directed verdict should be denied "unless it appears, as a matter of law, that a recovery cannot be had by the plaintiff upon any view of the facts which the evidence reasonably tends to establish." Given these principles it is clear that a defendant in a negligence action is not entitled to a directed verdict unless the plaintiff has failed, as a matter of law, to establish the elements of actionable negligence.
McMurray v. Surety Federal Sav. & Loan Asso., 82 N.C.App. 729, 730, 348 S.E.2d 162, 164 (1986) (citations omitted). "Negligence has been defined as the failure to exercise proper care in the performance of a legal duty which the defendant owed the plaintiff under the circumstances surrounding them. The traditional elements of actionable negligence are the existence of a legal duty or obligation, breach of that duty, proximate cause and actual loss or damage." Id. at 731, 348 S.E.2d 162, 164.
We agree with plaintiffs that Smith's relationship with Omega was that of an independent contractor and not an employee. "Generally, one who employs an independent contractor is not liable for the independent contractor's [acts]." Kinsey v. Spann, 139 N.C.App. 370, 374, 533 S.E.2d 487, 491 (2000). However, in certain limited situations an employer may be held liable for the negligence of its independent contractor. Such a claim is not based upon vicarious liability, but rather is a direct claim against the employer based upon the actionable negligence of the employer in negligently hiring a third party. Id. at 375, 533 S.E.2d at 491-92, citing Woodson v. Rowland, 329 N.C. 330, 352, 407 S.E.2d 222, 235 (1991)("The party that employs an independent contractor has a continuing responsibility to ensure that adequate safety precautions are taken.... The employer's liability for breach of this duty `is direct and not derivative....'"). Because plaintiff's claim against Omega is a direct claim, there must be a legal duty owed by the employer to the injured party in order to establish the claim for negligent hiring. Once that duty is established then the plaintiff must prove four additional elements to prevail in a negligent hiring and retention case: "(1) the independent contractor acted negligently; (2) he was incompetent at the time of the hiring, as manifested either by inherent unfitness or previous specific acts of negligence; (3) the employer had notice, either actual or constructive, of this incompetence; and (4) the plaintiff's injury was the proximate result of this incompetence." Kinsey v. Spann, 139 N.C.App. 370, 377, 533 S.E.2d 487, 493 (2000), citing Medlin v. Bass, 327 N.C. 587, 591, 398 S.E.2d 460, 462 (1990). Most of our cases dealing with negligent hiring of an independent contractor have turned upon the third element, whether the employer had actual or constructive notice of the incompetence of the independent contractor. Kinsey, 139 N.C.App. 370, 533 S.E.2d 487 (holding defendant had no notice of her nephew's incompetence in tree removal); Woodson, 329 N.C. 330, 407 S.E.2d 222 (holding that a general contractor did not have notice of subcontractor's practices which led to a trench cave-in); Medlin, 327 N.C. 587, 398 S.E.2d 460 (holding that defendant school system did not have notice of a principal's pedophilic tendencies). Since these cases turned on the notice question, they do not contain any significant discussion of the duty owed by the employer to the plaintiff.
However, other cases make it clear that there must be a duty owed by the employer to the plaintiff in order to support an action for negligent hiring. In the leading case of Page v. Sloan, 281 N.C. 697, 702, 190 S.E.2d 189, 192 (1972)(citing 40 Am.Jur.2d, Hotels, Motels and Restaurants § 81), our Supreme Court stated that the "duties thus imposed upon an innkeeper for the protection of his guests `are nondelegable, and liability cannot be avoided on the ground that their performance was entrusted to an independent contractor.'" In Kinsey, this Court stated that in cases where the independent contractor engages in ultra-hazardous or inherently dangerous work, that "the employer has a non-delegable duty for the safety of others." Kinsey, 139 N.C.App. at 374, 533 S.E.2d at 491, citing Canady v. McLeod, 116 N.C.App. 82, 88, 446 S.E.2d 879, 883 (1994).
The nature and extent of the duty owed by the employer to injured parties in negligent hiring cases has not been described with great precision in the case law of North Carolina to date. However:
Most jurisdictions accepting the theory of negligent hiring have stated that an employer's duty to select competent employees extends to any member of the general public who comes into contact with the employment situation. Thus, courts have found liability in cases where employers invite the general public onto the business premises, or require employees to visit residences or employment establishments. One commentator, in analyzing the requisite connection between plaintiffs and employment situations in negligent hiring cases, noted three common factors underlying most case law upholding a duty to third parties: (1) the employee and the plaintiff must have been in places where each had a right to be when the wrongful act occurred; (2) the plaintiff must have met the employee as a direct result of the employment; and (3) the employer must have received some benefit, even if only potential or indirect, from the meeting of the employee and the plaintiff.
Cindy M. Haerle, 68 Minn. L.Rev. 1303, 1308-09, MINNESOTA DEVELOPMENTS: Employer Liability for the Criminal Acts of Employees Under Negligent Hiring Theory: Ponticas v. K.M.S. Investments (1984) (citation omitted)(emphasis added). Courts in other jurisdictions have generally, though not exclusively, declined to hold employers liable for the acts of their independent contractors or employees under the doctrine of negligent hiring or retention when any one of these three factors was not proven. Id. See also McLean v. Kirby Co., 490 N.W.2d 229 (N.D., 1992); Baugher v. A. Hattersley & Sons, Inc., 436 N.E.2d 126, 129 (Ind.Ct.App., 1982); Parry v. Davison-Paxon Company, 87 Ga.App. 51, 73 S.E.2d 59 (1952); Goforth v. Office Max, 48 Va. Cir. 463, 467 (Va. Cir. Ct., 1999). It is only after a plaintiff has established that the defendant owed a duty of care that the trial court considers the other elements necessary to establish a claim for negligent hiring or retention of an independent contractor. See 68 Minn. L.Rev. 1303, 1308, supra ("Thus, to be liable the employer must first owe the plaintiff a duty of care.").
In the instant case Smith was not in a place where he had a legal right to be since he broke in to plaintiffs' home; Smith and plaintiffs did not meet as a direct result of Smiths' relationship with defendants, since he did not enter plaintiffs' home as a salesman; finally, defendants received no benefit, direct, indirect or potential, from the tragic "meeting" between Smith and plaintiffs. We have found no authority in North Carolina suggesting that defendants owed plaintiffs a duty of care on these facts, and we hold that in fact none existed.
We refuse to make employers insurers to the public at large by imposing a legal duty on employers for victims of their independent contractors' intentional torts that bear no relationship to the employment. We note that because this is a direct action against the employer, for the purposes of this appeal the result would be the same if Smith had been an employee of defendants instead of an independent contractor. Smith could have perpetrated the exact same crimes against these plaintiffs, in the exact same manner, and with identical chances of success, on a day that he was not selling Omega's meats and driving Omega's vehicle.
Because Omega did not owe plaintiffs a duty of care, plaintiffs had no legal cause of action against Omega grounded in negligent hiring or retention. Having so held, we must further hold that the same reasoning applies to defendant Cassano. Therefore, the trial court properly granted defendants' motion for directed verdict pursuant to Rule 50 of the North Carolina Rules of Civil Procedure. Our holding should not be interpreted as limiting employers' duties to third parties in negligent hiring or retention claims to duties that are non-delegable. What is required, however, is a nexus between the employment relationship and the injury.
Assuming arguendo that defendants did owe plaintiffs a duty of care, we further hold there was insufficient evidence, taken in the light most favorable to plaintiffs, to prove that any negligence on the part of defendants was the proximate cause of plaintiffs' injuries.
"Proximate cause is a cause which in natural and continuous sequence, unbroken by any new or independent cause, produced the plaintiff's injuries, and without which the injuries would not have occurred, and one from which a person of ordinary prudence could have reasonably foreseen that such a result, or consequences of a generally injurious nature, was probable under all the facts as they existed." Thus, it is axiomatic that proximate cause requires foreseeability.
Johnson v. Skinner, 99 N.C.App. 1, 7-8, 392 S.E.2d 634, 637 (1990)(internal citations omitted). Plaintiffs argue that "it was foreseeable to defendants that sending a person such as Smith, with his recent, as well as long, record and propensity for violence, into residences could and likely would create an unreasonable risk of harm." In support of this contention they cite the North Dakota Supreme Court case of McLean v. Kirby Co., 490 N.W.2d 229 (N.D., 1992). While plaintiffs may be correct in their assertion that sending Smith into residences could foreseeably create an unreasonable risk of harm, the foreseeability of a risk of harm is insufficient unless defendants' negligent hiring or retention of Smith in some manner actually caused the injury in question.
In McLean, the victim "let Molachek into her apartment to demonstrate [defendant's] vacuum cleaner. Molachek also brought with him a set of knives, provided by the distributor, as a `door opener' or `gift offering' for allowing the in-home demonstration. After beginning the demonstration, Molachek used the knives in assaulting and raping [the victim]." McLean, 490 N.W.2d at 232. In McLean, defendant's independent contractor was invited into the victim's home as a direct result of his position as a representative of defendant. Further, he accomplished the assault and rape by utilizing knives provided to him by the defendant. The facts in McLean support a finding of proximate cause arising out of the employment or independent contractor relationship. This is not true in the instant case. As discussed above, though Smith was driving an Omega truck, his association with defendants did not advance his criminal endeavor in any manner. The same result would have occurred had he not been driving an Omega truck.
Therefore, even assuming arguendo that defendants were negligent in hiring Smith, this negligence was not the proximate cause of plaintiffs' injuries. The trial court correctly granted defendants' motion for directed verdict. This assignment of error is without merit.
AFFIRMED.
Judge CALABRIA concurs.
Judge GEER dissents.