STATE OF NEW JERSEY
TRANSPORTATION
COMPENDIUM OF LAW
Matthew W. Bauer
Clyde & Co US LLP
200 Campus Drive, Suite 300
Florham Park, NJ 07932
Tel: (973) 210-6730
Email: mbauer@clydeco.us
www.clydeco.cus
Revised 2012
A.
Respondeat Superior, Negligent Hiring and Retention, Negligent Supervision, and
Negligent Entrustment.
1.
Respondeat Superior (Let the Master Answer)
i.
What are the elements necessary to establish liability under a theory of
Respondeat Superior?
Generally, under New Jersey law, “an employer can be found liable for the
negligence of an employee causing injuries to third parties, if, at the time
of the occurrence, the employee was acting within the scope of his or her
employment.” Carter v. Reynolds, 175 N.J. 402, 408-09 (2003).
Therefore, to succeed in bringing a respondeat superior claim, “a plaintiff
must prove (1) that a master-servant relationship existed and (2) that the
tortious act of the servant occurred within the scope of that employment.”
Id. If no master-servant relationship exists, no further inquiry need take
place because the master-servant relationship is the sine qua non for the
invocation of respondeat superior. Id.
In defining “scope of employment,” New Jersey follows the Restatement
(Second) of Agency, § 228 (1957): 1
1) The conduct of a servant is within the scope of employment
if, but only if (a) it is of the kind he is employed to perform;
(b) it occurs substantially within the authorized time and
space limits; (c) it is actuated, at least in part, by a purpose to
serve the master, and; (d) if force is intentionally used by the
servant against another, the use of force is not unexpected by
the master.
2) The conduct of a servant is not within the scope of
employment if it is different in kind from that authorized, far
beyond the authorized time and space limits or too little
actuated by a purpose to serve the master.
DiCosala v. Kay, 91 N.J. 159, 169 (1982).
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New Jersey’s Courts have not yet adopted the formulation of respondeat superior given in the Restatement (Third) of Agency. See
Restatement (Third) Of Agency § 7.07. The key difference between the Second and Third Restatement is the degree to which the employee
must intend his or her actions to be in service of his or her employer before vicarious liability can attach. In the Second Restatement, the conduct
is not within the scope of employment if it is “too little actuated by a purpose to serve the master.” Restatement (Second) Of Agency § 228(2)
(1958). However, in the Third Restatement, conduct is not within the scope of employment “when it occurs within an independent course of
conduct not intended by the employee to serve any purpose of the employer.” Restatement (Third) Of Agency § 7.07(2) (1958) (emphasis added).
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ii.
Placard Liability
New Jersey does not recognize the doctrine of placard liability. Instead,
the cases recognize that under the I.C.C. regulations, the carrier/lessee has
full and complete responsibility during the term of the lease. A
driver/lessor engaged by a carrier within the scope of I.C.C. regulations
has in effect become a statutory employee of the carrier and the
relationship between the two parties is governed by the I.C.C. regulations.
When such a relationship arises, the carrier/lessee takes “exclusive
possession, control, and use of the equipment and … the complete
assumption of responsibility in response thereto”.
Cox v. Bond
Transportation, 53 N.J. 186, 201 (1969). There is a presumption that an
I.C.C. number affixed to a vehicle signifies who is responsible for the
operation of the vehicle; however that presumption may be rebutted.
Planet Insurance Co. v. Anglo American Insurance Co., Ltd., 312 N.J.
Super. 233 (App. Div. 1998).
3.
Negligent Hiring/Retention
i.
What are the elements necessary to establish liability under a theory of
negligent hiring/retention?
In Di Cosala v. Kay, 91 N.J. 159 (1982), the New Jersey Supreme Court
recognized a cause of action for negligent hiring (or in this case retention)
explaining:
In short, persons must use reasonable care in the
employment of all instrumentalities--people as well
as machinery--where members of the public may be
expected to come into contact with such
instrumentalities. See Comment e to Restatement
(Second) of Agency § 213 ("One who engages in an
enterprise must take care to see that all the
instrumentalities, human or mechanical, which he
uses are such as are not likely to cause harm to third
persons.")
Id. at 171-72.
The Supreme Court further distinguished the tort of negligent
hiring/retention from respondeat superior liability, noting that a scope of
employment limitation is not implicit in the former. Id. at 172-73 (“Thus,
the tort of negligent hiring addresses the risk created by exposing members
of the public to a potentially dangerous individual, while the doctrine of
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respondeat superior is based on the theory that the employee is the agent or
is acting for the employer. Therefore the scope of employment limitation
on liability which is a part of the respondeat superior doctrine is not implicit
in the wrong of negligent hiring.”)
The tort of negligent hiring/retention has two elements of proof that require
that the employer 1) knew or had reason to know of the particular unfitness,
incompetence or dangerous attributes of the employee and could reasonably
have foreseen that such qualities created a risk of harm to another person,
and 2) through the negligence of the employer in hiring the employee, the
employee’s incompetence, unfitness or dangerous characteristics
proximately caused the injury.
Id. at 173-174 (1982)
4.
Negligent Entrustment
i.
What are the elements necessary to establish liability under a theory of
negligent entrustment?
New Jersey law recognizes that an employer may be held responsible for
the torts of an employee under a negligent entrustment cause of action.
Cosgrove v. Lawrence, 214 N.J. Super. 670, 679 (Law Div. 1986), aff’d
215 N.J. Super. 561 (App. Div. 1987). However, New Jersey case law has
not expressly addressed the issue of negligent entrustment in an
employment context.
In New Jersey Citizens United v. Hernandez, 2006 WL 686571 (App. Div.
2006), the Court defined negligent entrustment as:
It is negligence to permit a third person to use a thing or to
engage in an activity which is under the control of the actor,
if the actor knows or should know that such person intends
or is likely to use the thing or to conduct himself in the
activity in such a manner as to create an unreasonable risk
of harm to others.
Id. at 4 (citing Restatement (Second) of Torts § 308
(1965)).
The Court further held that in an action based on the theory of negligent
entrustment, the plaintiff generally must prove that:
(1) the entrustee was incompetent, unfit, inexperienced, or
reckless; (2) the entrustor knew (in some jurisdictions
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actually knew), should have known, or had reason to know
of the entrustee's condition or proclivities; (3) there was an
entrustment of the dangerous instrumentality; (4) the
entrustment created an appreciable risk of harm to others;
and (5) the harm to the injury victim was proximately or
legally caused by the negligence of the entrustor and the
entrustee.
Id. (citing 57A Am. Jur. 2d Negligence § 318 (2005)).
5.
Negligent Supervision
i.
What are the elements necessary to establish liability under a theory of
negligent supervision?
Employer liability to third parties for the torts committed by its employees
may be established under the doctrine of negligent supervision. Cosgrove,
214 N.J. Super. at 679-80. A claim for negligent supervision against an
employer by a third party would be based upon acts which were
committed by the employee outside of the scope of his/her employment.
Id. at 679-80.
To establish a claim of negligent supervision a plaintiff must demonstrate
the following elements:
(1) the employer knew or had reason to know of the
particular unfitness, incompetence, or dangerous attributes
of the employee, (2) the employer could reasonably have
foreseen that these qualities created a risk of harm to other
persons, and (3) the employer’s negligence and the
employee’s unfitness or dangerous characteristic
proximately caused the injury to the third party.
See Silvestre v. Bell Atlantic Corp., 973 F.Supp. 475, 486
(D.N.J. 1997).
Thus, a negligent supervision claim might be successful if the employee’s
conduct occurred while he or she was subject to the supervision or control
of the employer. But even then, the employer generally must have had
some reason to anticipate the harmful conduct by the employee before it
may be held liable for failing to prevent the harm through proper
supervision of employee.
Since the claim of negligent supervision is fairly new in New Jersey, there
is only one reported case which addresses such a cause of action brought
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by a third party against an employer defendant. See Cosgrove, supra. All
other cases addressing claims of negligent supervision were filed by an
employee against his/her employer. In those cases, the courts consistently
held that an employee cannot assert a claim of negligent supervision
against his or her employer. Silvestre, 973 F.Supp. at 486. Under New
Jersey law an action in negligence against an employer is barred by the
New Jersey Workers’ Compensation Act, N.J.S.A. § 34:15-8. Id. (citing
Fregara v. Jet Aviation Bus. Jets, 764 F.Supp. 940, 954 n.8 (D.N.J. 1991)).
B.
Defenses
Traditional Tort Defenses Depending on the facts of a particular case, traditional tort defenses may apply such as
comparative fault, failure to mitigate damages, superceding or intervening causes, and
collateral source.
C.
Punitive Damages
1. Legal standards for recovery of punitive damages.
In New Jersey, punitive damages are governed by the Punitive Damages Act
("PDA"). N.J.S.A. 2A:15-5.9 to -5.17 (West 2012). To recover punitive damages
under the PDA, a plaintiff must prove "by clear and convincing evidence, that the
harm suffered was the result of the defendant's acts or omissions, and such acts or
omissions were actuated by actual malice or accompanied by a wanton and
willful disregard of persons who foreseeably might be harmed by those acts or
omissions." N.J.S.A. 2A:15-5.12(a) (West 2012). "Actual malice" is "intentional
wrongdoing in the sense of an evil-minded act." N.J.S.A. 2A:15-5.10 (West
2012). "Wanton and willful disregard" is "a deliberate act or omission with
knowledge of a high degree of probability of harm to another and reckless
indifference to the consequences of such act or omission." Id. Mere negligence,
however gross, is insufficient. N.J.S.A. 2A:15-5.12(a) (West 2012).
Generally speaking, as a prerequisite to an award for punitive damages, a plaintiff
must first receive an award of compensatory damages. Smith v. Whitaker, 160
N.J. 221, 239 (1999). Under certain circumstances, however, courts will award
punitive damages on a "free-standing" basis where a plaintiff receives a valid
judgment for, at a minimum, nominal damages. Id.
2. Application to the driver and the motor carrier.
Punitive damages are only applicable in vicarious liability cases where there has been
"actual participation by upper management or willful indifference." Davis v.
Devereux Foundation, 414 N.J. Super. 1, 17 (App. Div. 2010) (citing Cavuoti v. N.J.
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Transit Corp., 161 N.J. 107, 117 (1999)). Courts will also consider the Restatement
(Second) of Torts § 909 when determining whether to impose punitive damages in
vicarious liability cases. Enright v. Lubow, 202 N.J. Super. 52, 82 (App. Div. 1985).
The Restatement provides that punitive damages can only be awarded against a
principal for acts of its agent if:
(1) the principal authorized the act;
(2) the agent was unfit and the principal was reckless in employing or
retaining the agent;
(3) the agent was acting in the scope of his or her own employment in a
managerial capacity; or
(4) the principal ratified the act.
Restatement (Second) of Torts § 909. Absent any one of these factors, however,
punitive damages may not be assessed vicariously against a principal like a motor
carrier for acts of an agent like its driver. Enright, 202 N.J. Super. at 82.
3. Circumstances in which punitive damages have been upheld against motor carriers.
Punitive damages may be potentially recoverable against a motor carrier in cases
involving claims of negligent hiring, training and supervision. However, mere
negligence alone will not sustain an award of punitive damages in such cases. Sipler v.
Trans Am Trucking, Inc., 2010 WL 4929393 (D.N.J.).
4. Statutory limitations on recoverable punitive damages.
New Jersey caps punitive damages to five (5) times compensatory damages or
$350,000.00, whichever is greater. N.J.S.A. 2A: 15-5.14(b) (2008); Johnson v.
Mountainside Hosp., 239 N.J. Super. 312, 322 (App. Div. 1990) (holding that
constitutionality "is now well settled"). The PDA also requires the trial judge, prior
to entering judgment on a punitive damages award, to determine that the award is
"reasonable in its amount and justified in the circumstances of the case, in light of the
purpose to punish the defendant and to deter that defendant from repeating such
conduct." N.J.S.A. 2A:15- 5.14(a). The trial judge is empowered to reduce or
expunge an award. Id.
5. Application of joint and several liability
Because punitive damages are designed to punish the wrongdoer, not to compensate
the injured party, they cannot be apportioned or subject to contribution among jointtortfeasors. Blazovic v. Andrich, 124 N.J. 90 (1991).
This Compendium outline contains a brief overview of certain laws concerning various
litigation and legal topics. The compendium provides a simple synopsis of current law and
is not intended to explore lengthy analysis of legal issues. This compendium is provided for
general information and educational purposes only. It does not solicit, establish, or
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author, editor or contributor. The contents should not be construed as legal advice or
opinion. While every effort has been made to be accurate, the contents should not be relied
upon in any specific factual situation. These materials are not intended to provide legal
advice or to cover all laws or regulations that may be applicable to a specific factual
situation. If you have matters or questions to be resolved for which legal advice may be
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