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Vicarious Liability of a Franchisor in Maine

italian-pizza-1196126-m.jpgIn motorcycle and car accidents, an injured person’s full and complete recovery for their injuries may depend upon his/her ability to show the vicarious liability of a franchisor. Maine law permits a plaintiff to recover from a franchisor if the injured person can show the franchisor is vicariously liable for the actions of the person who directly caused the harm.

This issue arises most frequently in car or motorcycle cases when a negligent driver is working for his or her employer when the harm is inflicted. A more nuanced question occurs in the context of franchises, which sometimes have control over their franchisees. When can a franchisor be held vicariously liable for the injuries inflicted by a franchisee’s employee?

In Maine and many other states, an employer can be held liable for an employee’s negligent actions. It should be noted, however, that companies are usually not held liable for its independent contractor’s actions. Often the first thing that must be proved in vicarious liability cases is an employer-employee relationship.

Crucial to the distinction between an employment relationship and an independent contractor relationship is the idea that an employer has the right to control and direct the detail of an employee’s conduct. An employer does not have a high degree of control over an independent contractor.

Franchisors are not typically in an employer-employee relationship with their franchises. However, a court does look at the degree of control a franchisor has over a franchisee’s day-to-day operations in determining whether vicarious liability attaches in a particular case.

In some states, a franchisor may be subject to vicarious liability for the torts of its franchisee only if it had a right of control over the daily operation of the specific aspect of the franchisee’s business that is alleged to cause the harm. Other states apply a more traditional right to control test which focuses on whether a franchisor actually controlled the performance of a franchisee’s day to day operations.

A 2010 case addressed the question of a franchisor’s vicarious liability for the negligent actions of a franchisee for the first time. In that case, a motorcyclist was seriously hurt when he crashed into a TDBO, Inc. car whose driver was delivering pizzas. TDBO is a Domino’s Pizza franchisee and at the time of the accident Domino’s owned no interest in TDBO.

Domino’s did receive royalties, but TDBO was otherwise almost totally independent, maintaining its own bank account and having its own officers, directors, and employees. TDBO also owned or leased its own equipment. Domino’s did exert influence over food prep, store location, training, advertising, insurance and records. But the only control exerted by Domino’s related to staffing was that a qualified driver needed to be present at the store while it was open. The franchise agreement left TDBO with sole responsibility for training and expressly stated there was no agency relationship between the two entities. The agreement incorporated a manual that included rules related to pizza delivery. Domino’s required TDBO’s driver to follow all laws and safety rules.

The motorcyclist and his wife sued not only the individual driver and TDBO, but also Domino’s Pizza, for negligence, vicarious liability and loss of consortium. Domino’s moved for a partial summary judgment, which the plaintiffs opposed on the grounds that there were disputed issues of fact on the issue of whether Domino’s had control over TDBO’s operations and was vicariously liable as a result.

The trial court granted the motion for summary judgment, noting there might be disputed issues with respect to Domino’s Pizza’s control over TDBO, but there were no issues raised to whether Domino’s controlled the driver.

The couple appealed. The Maine Supreme Judicial Court explained that the proper focus of the analysis was on the relationship between Domino’s and TDBO because if TDBO was an agent-employee of Domino’s, its employee was an agent-employee of Domino’s. The Court applied the traditional actual control test and concluded that even though there were numerous quality control requirements imposed on TDBO, Domino’s did not have actual control over TDBO’s day-to-day operations.

The Agreement between TDBO and Domino’s specified an independent contractor relationship. While this label was not controlling, the agreement also included specifications that supported the independent contractor relationship. Among these was the statement that Domino’s had no responsibility to implement employment and driver training.

The right to conduct inspections or terminate the franchise relationship were not enough to impose vicarious liability. Accordingly the Court affirmed the lower court’s judgment.

If you or a loved one has been injured in a motorcycle accident where a franchise might be involved, contact the motorcycle accident attorneys of Briggs & Wholey via our online form for a free consultation. The Rockport personal injury attorneys at Briggs & Wholey have more than 50 years of combined experience representing individuals throughout Maine who suffered a serious or life-threatening injuries. At Briggs & Wholey, our lawyers can investigate the facts and determine whether or not a franchisor or a franchisee may be responsible for your injuries.

More Blog Posts:

Study Claims Drivers in Maine and Across the U.S. Are Distracted More Than They Realize, Maine Personal Injury Lawyers Blog, June 13, 2013
One Hurt in Negligent York County Traffic Wreck, Maine Personal Injury Lawyers Blog, June 7, 2013