## Facts

- Gary McCoy ordered pizza from a Papa John’s-branded store operated by RWT, Inc., a franchisee.
- Wendell Burke, a delivery driver employed by RWT (not the franchisor), delivered the order.
- McCoy and Burke gave conflicting accounts of the delivery encounter, including whether Burke refused to leave and whether McCoy behaved threateningly and displayed a rifle.
- About two hours later, Burke returned to the store; an RWT supervisor contacted police over Burke’s objections to report McCoy’s conduct.
- McCoy was arrested and charged with unlawful imprisonment; a local newspaper later reported the arrest.
- The criminal charge was dismissed with prejudice on McCoy’s motion.
- McCoy sued Burke, RWT, and Papa John’s International, Inc. for malicious prosecution and defamation; the actions against RWT and the franchisor were consolidated after it became clear Burke was employed by RWT.

## Issues

1. Whether RWT could be held vicariously liable for malicious prosecution based on its employee’s conduct and the supervisor’s police report, or whether the conduct was outside the scope of employment as an independent course of conduct.
2. Under what standard a franchisor may be held vicariously liable for torts occurring at a franchise location.
3. Whether Papa John’s International had control or a right of control over the daily operation of the specific aspect of the franchisee’s business alleged to have caused the harm (pizza delivery and the driver’s actions), sufficient for vicarious liability for malicious prosecution and defamation.

## Decision

- The Kentucky Supreme Court reversed the Court of Appeals and reinstated the trial court’s summary judgment for both RWT and Papa John’s International.
- As to RWT, the Court held the complained-of conduct constituted an independent course of conduct not intended to serve the employer’s purposes and thus fell outside the scope of employment; RWT was not vicariously liable.
- As to the franchisor, the Court adopted a control-based rule limiting franchisor vicarious liability to situations where the franchisor controls or has the right to control the daily operation of the specific aspect of the franchisee’s business that allegedly caused the harm.
- Applying that rule, the Court concluded Papa John’s International lacked control over the delivery driver’s intentional conduct and could not be held vicariously liable for malicious prosecution or defamation.

## Legal Principles

- An employer is vicariously liable for an employee’s torts only when the employee acts within the scope of employment; acts undertaken in an independent course of conduct serving no employer purpose are outside the scope as a matter of law.
- A franchisor is vicariously liable for torts of a franchisee (or the franchisee’s employees) only when the franchisor, in fact, has control or a right of control over the daily operation of the specific aspect of the franchisee’s business alleged to have caused the harm.
- General franchise brand and quality controls, without day-to-day control of the harm-causing operational aspect, do not establish franchisor vicarious liability.
- Where vicarious liability fails as a matter of law, summary judgment is proper without resolving the underlying tort elements.

## Conclusion

The Kentucky Supreme Court held that the franchisee was not vicariously liable because the delivery driver’s conduct was outside the scope of employment, and the franchisor was not vicariously liable because it lacked control over the daily operation of the delivery activity that allegedly caused the harm; summary judgment for both defendants was reinstated.


Papa John’s Int’l, Inc. v. McCoy, 244 S.W.3d 44 (Ky. 2008)