Court Opinion

ID: 9788436
Source: CourtListenerOpinion
Date Created: 2023-08-31 00:53:38.811317+00
Date Added: 2024-06-11T07:37:03.364543
License: Public Domain

Rose, J.,
with whom Leavitt and Maupin, JJ.,
agree, concurring in part and dissenting in part:
I join with the majority’s affirmance of the general damages verdict, but I believe that the majority defines the term “managerial agent,” as used in the Restatement (Second) of Torts § 909 (1979), too narrowly; and by doing so, it improperly strikes the punitive damages award.
*199The majority correctly references section 909 and its comment, but then declines to follow the general statements therein. Comment b states that a person acting in a managerial capacity can expose the corporation to punitive damages for malicious or outrageous acts if he or she approves of the act by a subordinate. There is ample evidence in the record to establish that Malloy approved the heinous acts by simply standing by and permitting the violent conduct by the employees he was supervising. Nowhere in section 909 or the comment does it state that a managerial agent must have policy-making authority or discretion to make ad hoc policy or corporate decisions.
Obviously, a manager who has the authority to make policy decisions and discretion to follow or abrogate corporate rules would be someone who is a managerial agent, but it does not follow that managers and supervisors who do not have this power or discretion cannot also be considered managerial agents.
Several courts have interpreted the term “managerial agent” to logically include those employees who manage or are in supervisory positions and are charged with enforcing a corporation’s rules and policies. For example, in Ramos v. Frito-Lay, Inc.,1 the Texas Supreme Court concluded that an employee with the title of district sales manager and supervisory authority over twelve employees was employed in a managerial capacity; and thus, the punitive damages award against Frito-Lay was proper. Also, in Albuquerque Concrete v. Pan Am Services,2 the Supreme Court of New Mexico concluded that “when a corporate agent with managerial capacity acts on behalf of the corporation, pursuant to the theoretical underpinnings of the Restatement rule of managerial capacity, his acts are the acts of the corporation; the corporation has participated.” The court observed that managerial agents could be those who enforce or effectuate corporate policies and rules.3 Moreover, in People v. East-West University, Inc.,4 the Illinois Court of Appeals noted that one who has supervision of subordinate employees in a managerial capacity should be included in the definition of managerial agent.
This interpretation of the term “managerial agent” is in accordance with our prior decision in Smith’s Food & Drug Centers v. Bellegarde, where we observed:
“In determining whether an agent acts in a managerial capacity, [the key] is to look to what the individual is authorized to do by the principal and to whether the agent has discretion *200as to what is done and how it is done. Job titles . . . should be of little importance.”5
Thus, a managerial agent can be a corporate employee who is in a supervisory position, as is the case here. Malloy was the acting supervisor of security employees when the incidents with Holman and Edwards occurred and was in charge of supervising the security employees and enforcing the corporation’s progressive-force policy. He obviously had substantial discretion in enforcing corporate policy. Malloy was present during much of the security guards’ tortious misconduct and had the power and responsibility to stop it. Given his supervisory position and his power to enforce corporate policy, Malloy should be considered a managerial agent for the Gold Coast.
The majority narrowly construes the term “managerial agent” by requiring that he or she possess policy-making authority or ad hoc discretion to make corporate rules and decisions. This restricts the imposition of punitive damages to instances where officers, directors, and a few upper-level executives are involved, assuming these corporate actors even have such authority. The majority cites with approval Albuquerque Concrete, which disapproved of the very restriction the majority now adopts:
In the modern world of multinational corporations, corporate control must be delegated to managing agents who may not possess the requisite upper-level executive authority traditionally considered necessary to trigger imposition of corporate liability for punitive damages. If we were to adopt the position that misconduct by managing agents who actually control daily operations is not sufficient to trigger corporate punitive damages, large corporations that routinely delegate managerial authority to shape corporate policy by making important corporate decisions could unfairly escape liability for punitive damages by virtue of their size.6
The practical effect of the majority decision will be to insulate corporations from punitive damages for the vast majority of acts of malice or outrageous behavior committed by their supervisors and managers. This is bad law and poor public policy. At a time when we have seen many illegal and outrageous acts committed by corporate America, it is not appropriate to reduce corporate responsibility for such egregious action.
Therefore, I respectfully concur in part and dissent in part, and I would affirm the punitive damages award against the Gold Coast.

 784 S.W.2d 667, 669 (Tex. 1990).

 879 P.2d 772, 778 (N.M. 1994).

 Id. at 777 (noting that a managerial employee is defined as one who formulates, determines, and effectuates his employer’s policies).

 516 N.E.2d 482, 485 (Ill. App. Ct. 1987).

 114 Nev. 602, 611, 958 P.2d 1208, 1214 (1998) (quoting J. Ghiardi & J. Kirchner, Punitive Damages Law and Practice, ch. 24, at 15 (1987)).

 879 P.2d at 778 (internal citation omitted).