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Fire Caused By Employee Overnight In Hotel Room Could Be Within The Scope Of Employment

Published by on November 10, 2009

In Rivett Group, LLC, et al. v. Chelda, Inc. et al., while denying a motion for summary judgment the United States District Court for the Western District of Virginia found that a restaurant employee’s conduct that led to a fire and damages at a hotel could be considered within the scope of that employee’s employment because […]

In Rivett Group, LLC, et al. v. Chelda, Inc. et al., while denying a motion for summary judgment the United States District Court for the Western District of Virginia found that a restaurant employee’s conduct that led to a fire and damages at a hotel could be considered within the scope of that employee’s employment because he was required to stay at the hotel during his training.  More after the break.

Defendant Ham’s Restaurant hired Defendant David Byers for Ham’s manager-in-training (“MIT”) program.  Ham’s is a wholly owned subsidiary of Defendant Chelda.  Ham’s sent Byers to the company’s Danville, VA restaurant to complete the six-to-eight week training program although Byers’ lived in Winston-Salem, NC.  Ham’s provided (or allegedly required) Byers accommodations at Plaintiff’s Super 8 Motel, adjacent to the Ham’s restaurant.  Plaintiff Rivett Group owns Super 8, and instigated this action.

Byers stayed at the Super 8 for more than three weeks before the incident that gave rise to this lawsuit.  Byers was an employee of Ham’s until July 18th or 19th, 2005.  At some point in the early morning of July 20, 2005, a fire started in the trash can in Byers’ room.  It was alleged by Plaintiffs that the fire started when Byers discarded a cigarette into the trash.  Byers maintained that other managers and MIT’s had been smoking in his room and dumped the ash tray into the trash.  The fire cause damage to the trash can, bed and frame before the sprinklers came on.  The sprinklers caused more damage though.  In fact, the hotel had to be closed for the week as a result of the fire and water damage caused by the fire. 

Byers did not complete the MIT program, and his last day of work for Ham’s is disputed.  Byers’ termination notice lists unprofessional behavior, misconduct and the fire as reasons for his dismissal.  Testimony from Ham’s managers claims that there were performance issues before the fire leading to his termination. 

Defendant Ham’s moved for summary judgment on issues related to Byers’ employment with Ham’s.  The court denied the motion for summary judgment finding that several material issues remained in dispute.  The court stated that the issues of Plaintiff’s last day of work, the reasons for his subsequent discharge were disputed and could have a material impact on the case.  Therefore, summary judgment was not proper.  The issue was genuine because a reasonable jury could return a verdict for the nonmoving party (Byers).  If Byers testimony that he did not start the fire is assumed true, it would likely preclude Ham’s from escaping liability.

Defendant Ham’s also moved for judgment as a matter of law.  The Court denied this motion because it was not clear whether Byers’ conduct was within the scope of employment.  The Court found that because there was doubt as to whether the employee acted within the scope of employment the issue should be decided by the jury and not as a matter of law by the court.  The doubt was caused by the fact that Byers was in a hotel paid for by Ham’s at Ham’s requirement.  Byers would not have stayed there without Ham’s insistence and he believed he was on duty twenty four hours a day at the hotel.  Byers was subject to being called for work at times he was at the hotel but not scheduled to work and he would have been disciplined if he refused to work when called.   Byers allegedly discussed the training program with managers in his hotel room the night of the fire.  The Court found these facts could support the claim that Byers was acting within the scope of his employment at all times in the hotel room, including when the fire took place.  Alternatively, it was not certain whether Byers’ had worked the previous three days.  Smoking was not part of the job description and necessary for him to complete his job duties.  Additionally, Byers was not performing services for Ham’s when the fire started.  The Court found that based on the above facts it was not clear whether the incident fell within the scope of employment and thus it should be a jury question.

The Court, however, granted Defendant Chelda, the parent company, motion for summary judgment.  In Virginia, a plaintiff must establish that a master-servant relationship existed at the time of injuries.  Byers’ could not do so.  An employee of a subsidiary company is not to be treated as an employee of the parent company in the normal parent-subsidiary relationship.  The court found Super 8’s single account billing to Chelda and Ham’s was not sufficient evidence to show a master-servant existed between Byers and Chelda.

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