2013
STATE OF MICHIGAN
TRANSPORTATION
COMPENDIUM OF LAW
Paul E. Scheidemantel
Eric Shih
Clark Hill PLC
500 Woodward Avenue
Suite 3500
Detroit, MI 48226-3435
Phone: (313) 965-8310
Email: pscheidemantel@clarkhill.com
Email: eshih@clarkhill.com
www.clarkhill.com
A. Elements of Proof for the Derivative Negligence Claims of Negligent Entrustment,
Hiring/Retention and Supervision
1. Respondeat Superior (Let the Master Answer)
a. What are the elements necessary to establish liability under a theory of Respondeat Superior?
Generally speaking, “[t]he test of the liability of the master for his servant’s acts is whether the
latter was at the time acting within the scope of his employment. The phrase ‘in the course or
scope of his employment or authority’ when used relative to the acts of a servant, means while
engaged in the service of his master, or while about his master’s business.” Nevins v. Roach, 249
Mich. 311, 313-14, 228 N.W. 709 (1930). “A master is responsible for the wrongful acts of his
servant committed while performing some duty within the scope of his employment. An
employer is not vicariously liable for acts committed by its employees outside the scope of
employment, because the employee is not acting for the employer or under the employer’s
control.” Rogers v. J.B. Hunt Transport, Inc., 466 Mich. 645, 651, 649 N.W.2d 23 (2002). For
example, an employee’s negligence while on a frolic or detour, or after hours, is not imputed to
the employer. Nor is an employer liable for torts intentionally or recklessly committed by an
employee beyond the scope of his employer’s business. Id.; see also Chajnacki v. Dougherty,
254 Mich. 296, 297, 236 N.W. 789 (1931) (“[A] master is not liable for the negligent acts of his
servant unless at the time the servant is acting within the scope of his employment or within his
actual authority.”).
As applied to motor carriers who do not directly employ their drivers, Michigan “adopt[s] that
portion of the statutory employee rule that creates a fictional employment relationship between
the driver and carrier and then look[s] to the application of state law for the imposition of
liability.” Paul v. Bogle, 193 Mich. App. 479, 488, 484 N.W.2d 728 (1992). A driver is
considered to be the “constructive” or “statutory” employee of the carrier when: (1) the carrier
does not own the vehicle; (2) the carrier operates the vehicle under an arrangement with the
owner that is subject to federal regulation; and (3) the carrier does not literally employ the driver.
The doctrine of respondeat superior imposes vicarious liability on the carrier for the negligence
of its “employee” driver. Id. at 487. Additionally, a carrier’s failure to remove its identifying
placards can be deemed evidence of its implied consent to the use of the vehicle, regardless of
whose business interests were being pursued at the time of an accident. Id. at 489-90.
2. Negligent Entrustment
a. What are the elements necessary to establish liability under a theory of negligent entrustment?
“To establish a claim of negligent entrustment involving a motor vehicle, the burden is on the
plaintiff to prove that: (1) the motor vehicle was driven with the permission and authority of the
owner, (2) the entrustee was in fact an incompetent driver, (3) the owner knew at the time of the
entrustment that the entrustee was incompetent or unqualified to operate the vehicle, or had
knowledge of such facts and circumstances as would imply knowledge on the part of the owner
of such incompetence, and (4) the entrustment was causally connected to the injury for which the
2
plaintiff complains. Brunell v. Snappy Car Rental, Inc., 1999 Mich. App. LEXIS 2495, * 3-4
(Mich. Ct. App. 1999) (citing Perin v. Peuler, 373 Mich. 531, 130 N.W.2d 4 (1964)).
Liability for negligent entrustment arises when “the owner permits an incompetent or
inexperienced person to use his chattel with knowledge that such use is likely to cause injuries to
others.” Haring v. Myrick, 368 Mich. 420, 423, 118 N.W.2d 260, 261 (1962). “In such
circumstances, the owner’s liability is also in part vicarious for it cannot arise unless the person
entrusted with the automobile uses it negligently; but, the primary basis for the owner’s liability
is said to be his own negligence in permitting its use by an incompetent or inexperienced person
with knowledge of the probable consequences. Id. See also Hendershott v. Rhein, 61 Mich.
App. 83, 232 N.W.2d 312 (1975); Elliott v. A. J. Smith Contracting Co., 358 Mich. 398, 413, 100
N.W.2d 257 (1960).
3. Negligent Retention/Hiring
a. What are the elements necessary to establish liability under a theory of negligent
retention/hiring?
To establish a claim for negligent retention/hiring, a plaintiff must prove that: (1) the employer
knew or should have known of the employee’s/contractor’s tortious propensities at the time of
hiring; and (2) the employer’s negligence was the proximate cause of the plaintiff’s injuries.
Under Eger v. Helmar, 272 Mich. 513, 262 N.W. 298 (1935), the plaintiff has the burden to
prove that the employer failed to exercise due care in hiring the employee/contractor, and “the
mere fact that the [employee/contractor] negligently caused an injury to another affords no
presumption that the employer was negligent in his selection” of the employee/contractor. Id. at
519. The court implicitly adopted the view that an employer has a duty to exercise care in hiring
and/or retaining workers, and may be held liable if it breaches that duty and causes damage to a
plaintiff. See id. In Lincoln v. Fairfield-Nobel Co., 76 Mich. App. 514, 518-19, 257 N.W.2d 148
(1977), the court held that under a negligent hiring or retention theory, the employer’s liability
arises out of its own negligent acts, not from its relationship with its employees or contractors.
Accordingly, “Under this theory, it would be unnecessary for [the] plaintiff to show any agency
relationship between [the plaintiff] and defendant.” Id.
As to an employee’s intentional torts, the Michigan Supreme Court held that “An employer who
knew or should have known of his employee’s propensities and criminal record before
commission of an intentional tort by [the] employee . . . would be liable for damages” to a
customer injured by his conduct. Hersh v. Kentfield Builders, Inc., 385 Mich. 410, 412, 189
N.W.2d 286 (1971) (citing Bradley v. Stevens, 329 Mich. 556, 46 N.W.2d 382 (1951)). The
court also held that “an employer must use due care to avoid the selection or retention of an
employee whom he knows or should know is a person unworthy, by habits, temperament, or
nature, to deal with the persons invited to the premises by the employer” and that “[t]he
employer’s knowledge of past acts of impropriety, violence, or disorder on the part of the
employee” are generally sufficient to make future tortious acts of a similar nature foreseeable.
Id. at 412-13.
3
4. Negligent Supervision
a. What are the elements necessary to establish liability under a theory of negligent supervision?
There is no reported Michigan case setting forth the elements of a negligent supervision claim
and applying them to find liability in the context of an employer/employee or principal/agent
relationship. That said, the court in Millross v. Plum Hollow Golf Club, 429 Mich. 178, 193; 413
N.W.2d 17 (1987) acknowledged that a master may be under a duty to exercise reasonable care
to control his servant while acting outside the scope of his employment to prevent him from
intentionally harming others or from conducting himself to create an unreasonable risk of harm
to them, if: (a) the servant (i) is upon the premises in possession of the master or upon which the
servant is privileged to enter only as his servant, or (ii) is using property of the master, and
(b) the master (i) knows or has reason to know that he has the ability to control his servant, and
(ii) knows or should know of the necessity and opportunity for exercising such control. Further,
Michigan has recognized liability for negligent supervision regarding the use of a motor vehicle
in the context of parental failure to adequately supervise a child. In Muma v. Brown, 378 Mich.
637, 646, 148 N.W.2d 760 (1967), the Michigan Supreme Court held that “[I]f a parent knows,
or could reasonably be expected to know, that an inexperienced minor operator over whom he
can exercise supervision and control will undertake to operate a motor vehicle, the availability of
which to such inexperienced driver is also under the control of the parent, the parent is under
obligation to exercise a high degree of care to render the vehicle unavailable to the child.” The
court held that under such theory, “the general rules of negligence must be applied,” meaning
that there must be “some act of the parents that was the proximate case of the injurious or
damaging act,” and that the harm resulting from the act was a foreseeable result. Id. at 644-45.
See also Dortman v. Lester, 380 Mich. 80, 84, 155 N.W.2d 846 (1968) (holding that liability
may arise in one for the tortious conduct of another if the person “controls, or has a duty to use
care to control the conduct of another who is likely to do harm if not controlled, and fails to
exercise care in such control”); Zapalski v. Benton, 178 Mich. App. 398, 444 N.W.2d 171 (1989)
(holding that parents may be liable for failing to prevent their child from intentionally harming
another if they are aware or have reason to know of their child’s tortious propensities).
B. Defenses
1. Admission of Agency is Not a Defense
Admission of agency would not likely serve as a defense to a derivate negligence claim in
Michigan. In Perin v. Peuler, 373 Mich. 531, 535, 130 N.W.2d 4, 7 (1964) (overruled on other
grounds), the Michigan Supreme Court held that the common law action for negligent
entrustment “stands unimpaired by Michigan’s 55-year-old owner-liability statute.” In Perin, the
plaintiff filed an action against the defendant father and defendant son, alleging she was injured
by the negligent driving of the defendant son, who was operating a car owned by the defendant
father. Id. at 547 (Kelly, J., dissenting). The defendant father responded by filing “an answer
admitting that the car was being driven by his son with his knowledge and consent,” thereby
implicating the owner liability statute. Id. Notwithstanding the danger of prejudice to the
defendant who had already admitted liability under one theory of suit, the Court held that “the
4
plaintiff in negligence may rely upon the owner-liability statute to hold the owner responsi[ble]
for negligent operation of the latter’s motor vehicle by another, and at the same time rely upon
the quoted rule to hold the owner responsi[ble] for personal negligence arising out of negligent
entrustment of such motor vehicle.” Id. at 538 (majority opinion).
2. Traditional Tort Defenses
Depending on the facts of a particular case, traditional tort defense such as comparative fault,
failure to mitigate damages, superseding and intervening causes, and others, may also apply.
C. Punitive Damages
1. Is evidence supporting a derivative negligence claim admissible to prove entitlement to
punitive damages?
Punitive damages are generally not recoverable in Michigan, except where expressly authorized
by statute. Gilbert v. DaimlerChrysler Corp., 470 Mich. 749, 765; 685 N.W.2d 391 (2004).
There are no Michigan statutes expressly authorizing punitive damages in civil tort liability
actions involving transportation-related matters. However, “exemplary” damages may be
recovered in certain circumstances as an added measure of compensatory damages, usually in
cases involving intentional torts. Exemplary damages are intended to compensate for malicious
or willful and wanton conduct by the defendant that “inspire[s] feelings of humiliation, outrage
and indignity” in the plaintiff. Veselenak v. Smith, 414 Mich. 567, 574, 327 N.W.2d 261 (1982).
Inasmuch as Perin v Peuler, 373 Mich. 531, 130 N.W.2d 4 (1964) suggests that evidence
supporting a defendant’s liability under a derivative theory of suit is admissible even where the
defendant has already admitted liability under an ownership statute or agency theory, Perin
would appear to allow introduction of such evidence to support an award of exemplary damages
under those circumstances as well.
This Compendium outline contains a brief overview of Michigan law concerning certain
select legal topics. It provides a general synopsis of current law and is not intended to serve
as a detailed analysis of legal issues. This outline is provided solely for general information
and educational purposes. It does not solicit, establish, or continue an attorney-client
relationship with any attorney or law firm identified as an author, editor or contributor.
The contents should not be construed as legal advice or opinion. While every effort has
been made to ensure accuracy, the contents should not be relied upon for any specific
factual situation. These materials are not intended to cover all laws or regulations that
may be applicable to a specific factual situation. If you have questions or matters to be
resolved for which legal advice may be indicated, you are encouraged to contact a lawyer
licensed in the state for which you are investigating a claim and/or seeking legal advice.
5