## Facts

- Floyd and Joyce Leafgreen held a homeowners policy issued by American Family Mutual Insurance Company.
- Edmund K. Arndt, an American Family insurance agent and the Leafgreens’ acquaintance, visited their home in his agent capacity to discuss insurance matters.
- During the visit, Arndt learned where the Leafgreens kept a lockbox containing valuables.
- Arndt disclosed the lockbox’s location and later conveyed the Leafgreens’ travel plans to people he knew were professional burglars.
- About five weeks later, the burglars broke into the Leafgreens’ home and stole the lockbox and its contents.
- American Family paid the Leafgreens for covered losses under the policy; Arndt was later arrested and imprisoned for his role.
- The Leafgreens then sued American Family in tort, seeking to hold it vicariously liable for all damages caused by the burglary under respondeat superior.

## Issues

1. Whether an insurer may be held vicariously liable for an agent’s participation in a burglary of insureds based on the agent’s employment-created access and knowledge.
2. Whether the connection between the agent’s employment and the burglary made the type of harm sufficiently foreseeable to require submission to a jury rather than summary judgment.

## Decision

- The South Dakota Supreme Court affirmed summary judgment for American Family.
- The court held that Arndt’s burglary-related conduct was outside the scope of his agency and not in furtherance of the insurer’s business.
- The court concluded the burglary was too extraordinary and attenuated from the agent’s duties to be a foreseeable cost of the insurer’s enterprise.
- Because no reasonable jury could find the required nexus between employment and harm, the scope-of-employment/foreseeability question was resolved as a matter of law.

## Legal Principles

- Respondeat superior requires that the tort be sufficiently connected to the employee’s work and, at least in part, motivated by a purpose to serve the employer.
- Even intentional or criminal acts may be imputed to an employer only when the type of harm is a foreseeable incident of the enterprise, not merely an act facilitated by workplace opportunity.
- Foreseeability in scope-of-employment analysis concerns whether the kind of harm is a normal risk of the business such that assigning the loss to the employer is fair.
- Summary judgment is appropriate when the employee’s conduct is plainly beyond the outer limits of employment and the employment-harm connection is legally insufficient.

## Conclusion

The court declined to impose vicarious liability on the insurer for its agent’s burglary scheme, holding that the agent’s criminal conduct was outside the scope of employment and too unforeseeable to be treated as a business risk attributable to the insurer.


Leafgreen v. Am. Fam. Mut. Ins. Co., 393 N.W.2d 275 (S.D. 1986)