Arizona Court of Appeals Division One Holds That Employers Are Not Vicariously Liable For Employees Who Commit Torts While on Out-Of-Town Assignments But Off Duty at the Time of the Incident

Gulf Interstate sent Houston-based employee Ian Gray on a long-term assignment which required him to stay in Yuma, Arizona where he was reimbursed for lodging, food, and a rental car.  One evening, after completing his work duties for the day, Gray and a colleague drove the rental car to a restaurant for dinner, colliding with Aaron Engler on their way back to the hotel.  Engler filed suit against Gray and Gulf Interstate, alleging Gray’s negligence and Gulf Interstate’s vicarious liability.  The trial court granted summary judgment for Gulf Interstate, holding that respondeat superior did not apply to these facts because Gray’s trip to the restaurant was outside the scope of his employment.

Two weeks later, Division Two of the Arizona Court of Appeals issued an opinion in McCloud v. Kimbro (“McCloud II”), in which the panel adopted a rule from workers’ compensation law and held that “an employee on out-of-town travel status is within the course and scope of his employment and subjects his employer to vicarious liability while traveling to and from a restaurant for a regular meal.”  224 Ariz. 121, 125 ¶ 17, 228 P.3d 113, 117 (App. 2010).  In light of this new case, Engler filed a motion for a new trial, which the trial court denied along with a subsequent motion for reconsideration.  Engler timely appealed.

The Arizona Court of Appeals affirmed, explicitly stating “we decline to follow the reasoning set forth in McCloud II.”   The Court discussed numerous differences in scope and policy rationale between workers’ compensation law and tort law, noting that workers’ compensation is designed to help injured employees received quick but circumscribed compensation for on-the-job injuries without regard to fault, whereas tort law provides broader compensation to third parties after assigning fault. 

In light of these differences, it is inappropriate to apply the less-restrictive “work-related injury” test from workers’ compensation law to a civil negligence claim.  The Court instead applied the narrower “scope-of-employment” test and agreed with the trial court that travel from an off-the-clock meal was outside the scope of Grey’s employment, even though he was out of town for his employer’s benefit, because the meal “did not occur within the authorized time and space limits of his work” and did not further Gulf Interstate’s interests.

Judge Winthrop authored the opinion; Judges Hall and Thompson concurred.