Facts
- Thomas J. Miller and Dutriel Michael Keating were principal stockholders and executive officers of Kustom Homes, Inc.; Miller served as vice-president and construction superintendent, and Keating served as president.
- After a serious dispute, Miller resigned and ended his employment with Kustom Homes.
- On April 13, 1973, after 10 p.m., Miller was attacked near his trailer home in Lafayette and beaten with a pipe by Johnny Lee Howren and James Guillet, carpenters employed by Kustom Homes.
- Miller alleged that Keating, Howren, and Guillet conspired to kill him to generate life insurance proceeds for the corporation.
- Evidence indicated Kustom Homes carried significant debt and had obtained life insurance on Miller, including additional coverage after Miller left the company.
- Howren and Guillet located and surveilled Miller before attacking him as part of a plan linked to Keating.
- Miller sued Keating, Howren, Guillet, Kustom Homes, and Hartford Accident & Indemnity Company (Kustom’s comprehensive general liability insurer) for damages and insurance coverage.
- A civil jury awarded Miller $25,500 in damages against Keating, Howren, Guillet, and Kustom Homes jointly and solidarily, and found Hartford not liable.
- The court of appeal affirmed the damage award and Hartford’s dismissal, affirmed liability as to Guillet, but reversed as to Kustom Homes, finding no corporate liability.
Issues
- Whether Kustom Homes was vicariously liable under respondeat superior for its employees’ intentional, criminal battery on a former officer/employee allegedly committed to benefit the corporation.
- Whether Hartford’s liability policy provided coverage for injuries resulting from a deliberate, conspiratorial battery.
Decision
- The Louisiana Supreme Court reinstated the judgment against Kustom Homes, holding the corporation vicariously liable for the battery.
- The court affirmed dismissal of Hartford, concluding the policy did not cover the intentional attack.
- The court affirmed judgment against Guillet, leaving him jointly and solidarily liable with the other tortfeasors.
Legal Principles
- An employer may be vicariously liable for an employee’s intentional tort when the conduct is sufficiently connected to employment-related objectives and is motivated, at least in part, by a purpose to serve the employer.
- Scope-of-employment analysis considers the relationship among the act, the employment, and the alleged employer-serving purpose, even if the tort occurs off premises and outside normal hours.
- Comprehensive general liability coverage generally does not extend to injuries expected or intended from the standpoint of the insured; deliberate attacks fall outside the covered risk when excluded by policy language.
- A reviewing court may reinstate a jury’s liability finding when the record supports the jury’s implicit determinations on purpose and connection to the employer’s business.
Conclusion
The court held Kustom Homes vicariously liable because the jury could find the employees’ planned battery was at least partly intended to serve corporate interests, but it enforced the liability policy’s intended-injury limitation to deny coverage and left the individual assailants jointly and solidarily liable.