Facts
- Apex Smelting Co. (Apex) operated a large manufacturing plant in Chicago and sought protection against sabotage and operational interruption.
- Apex entered a written agreement (dated February 2, 1943) with Burns to supply a uniformed, armed guard service for Apex’s property.
- The contract placed responsibility on Burns for hiring, equipping, paying, and supervising guards, and required Burns to cover items such as equipment expenses and employment-related taxes and insurance.
- Guards were to be guided by Apex’s general rules and written instructions issued through Apex’s designated representatives, and Apex’s wishes were to be considered in replacing guards Apex believed did not meet service requirements.
- Burns hired Harry Frontczak as a guard assigned to Apex’s plant.
- While on duty at Apex’s plant, Frontczak willfully and maliciously set three fires (and caused a combustion) on Apex’s property.
- Frontczak was later indicted and convicted of arson in the Criminal Court of Cook County, Illinois.
- Apex sued Burns for damages, alleging property damage, repair and restoration costs, and losses from interrupted operations (including a claimed $20,000 loss).
- Burns moved to strike and dismiss the complaint as legally insufficient, arguing it alleged neither negligence nor breach of contract by Burns and did not allege that any Burns employee acted within the scope of employment in causing Apex’s loss.
- The district court denied the motion without prejudice to renewal at the close of Apex’s case; after Apex presented its evidence, the court granted Burns’s motion for a directed verdict and entered judgment for Burns.
- Apex appealed to the Seventh Circuit.
Issues
- Whether Apex’s complaint and proof established a legally sufficient basis to hold Burns liable in negligence (including negligent hiring or supervision) for Frontczak’s conduct.
- Whether Frontczak’s intentional, malicious arson—though committed while on duty—could be treated as within the scope of his employment so as to impose respondeat superior liability on Burns.
- Whether Apex could rely on a breach-of-contract theory on appeal when the complaint did not allege breach and the case was not tried below as a contract case.
Decision
- The Seventh Circuit affirmed the directed verdict for Burns.
- The court found it difficult to identify a coherent liability theory from the complaint: it recited the contract and described the arson but did not allege a breach of the contract or that Apex’s loss was proximately caused by negligence of Burns or its employees acting within the scope of employment.
- On the evidence presented, Apex did not show negligent hiring or supervision by Burns sufficient to send the case to the jury.
- As a matter of law, Frontczak’s willful and malicious arson was not within the scope of his employment and was not in furtherance of Burns’s (or Apex’s) business, defeating respondeat superior liability.
- The court rejected Apex’s attempt to shift to a contract-based theory on appeal, stating that parties may not conceal a point in an unclear pleading and first present it on review.
- The Supreme Court denied certiorari, leaving the Seventh Circuit’s judgment in place.
Legal Principles
- A plaintiff must plead and try a coherent theory of liability; appellate review generally will not entertain a materially different theory first pressed on appeal.
- Negligent hiring or supervision requires proof that the employer knew or should have known of an employee’s unfitness and that the negligence was a proximate cause of the loss.
- Respondeat superior applies only when the employee’s acts are within the scope of employment and connected to serving the employer; a purely personal, malicious criminal act is outside that scope even if committed while on duty.
- A complaint that sets out a contract does not, without an allegation of breach and related proof at trial, support recovery on a contract theory.
Conclusion
The Seventh Circuit upheld judgment for the security contractor because Apex’s pleading and proof did not establish negligence by Burns, the guard’s intentional arson was a personal criminal act outside the scope of employment, and Apex could not reframe the case as a breach-of-contract action for the first time on appeal.