The Arizona Court of Appeals Division One holds that the relationship between real estate brokers and their salespersons is not, as a matter of law, one of employer and employee.

A real estate salesperson was returning from a real estate sales appointment when the car he was driving crossed the center line and struck a large truck.  Neither driver survived.  The truck driver brought a wrongful death lawsuit against the real estate broker for which the salesperson worked based on the theory that the broker was vicariously liable for the acts of the salesperson.

The Court of Appeals held that the real estate salesperson was not an employee of the broker for two reasons.  First, the Court held that the salespersons are not employees of real estate brokers as a matter of law because the statutes governing the relationship between salespersons and brokers provide that a broker’s duty to supervise real estate salespersons is more limited than that of an employer that supervises all aspects of an employee’s work.  Second, after evaluating the factors provided in Restatement (Second) of Agency § 220, the Court held that the undisputed facts did not establish the existence of an employer-employee relationship between the broker and salesperson in this case.

The Court further held that the broker was not vicariously liable for the acts of the salesperson as an independent contractor because the broker did not have a non-delegable duty to supervise the salesperson’s driving.

Judge Cattani delivered the opinion of the Court in which Judges Thumma and Howe joined.