For an employee, the opportunity to drive a company vehicle is certainly a job perk. For an employer, however, issuing company vehicles comes with the risk that it may be held liable for any negligence of the employee arising out of his or her use of the vehicle. Generally, employer liability hinges on whether the employee was acting within the course and scope of employment at the time of the accident, a concept that continues to evolve.
Hudgins v. Bemish, a case recently handed down by the Indiana Court of Appeals, sets forth how Indiana’s heightened summary judgment standard may impact employers seeking summary judgment on claims of vicarious liability, especially those who supply employees with company vehicles.[1]
This matter arose when Bemish, an employee of Ideal Heating Air Conditioning and Refrigeration, Inc. (“Ideal”), collided with a line of vehicles stopped at a traffic light while driving an Ideal-issued truck. Plaintiff, who was injured in the accident, brought suit against Bemish and Ideal. Most pertinent to this discussion, plaintiff alleged Ideal was vicariously liable to him under a theory of respondeat superior.
Ideal moved for summary judgment. In support, Ideal designated evidence, including (1) an affidavit of Ideal’s President, stating that at the time of the accident, Bemish was driving home and was not acting within the course and scope of his employment, (2) deposition testimony of Bemish, and (3) the Ideal Employee Handbook.
The trial court granted Ideal’s motion for summary judgment. However, on appeal, the Court reversed the decision. The Court found that Ideal’s own designated evidence was in conflict, which created a genuine issue of material fact as to whether Bemish was acting within the course and scope of his employment at the time of the accident.
Specifically, although the affidavit stated Bemish was not acting within the course and scope of his employment at the time of the accident, the Employee Handbook provided that company vehicles were to be used “solely for work related business.” Additionally, employees who were given a vehicle were required to drive it to their property or return it to the shop after shifts. Moreover, Bemish’s deposition testimony asserted that he believed he was acting within the course and scope of his employment at the time of the accident.
Employers should take note of the Hudgins decision for two reasons. First, in order to prevail on summary judgment in Indiana, an employer must ensure compliance with Indiana’s heightened standard, which requires a party seeking summary judgment to designate evidence that affirmatively negates the other party’s claim. As seen in Hudgins, a movant cannot designate evidence that contradicts itself, as this creates a genuine issue of material fact.
Second, employers who provide their employees with company vehicles should be cautious as to the terms under which those vehicles are given. Although under Indiana law “an employee on his way to work is normally not in the employment of the corporation,” [2] the ultimate determining factor is “whether the employee is in the service of the employer.”[3] Hudgins stands for the proposition that an employee driving to or from work in an employer-issued vehicle, which is to be used solely for work purposes, may be acting within the course and scope of his employment such that summary judgment is precluded.
If you would like a copy of this decision or have any questions with respect to commercial auto or transportation risks, please contact any member of our General Casualty / Excess & Surplus Risks Practice Group.
[1] Hudgins v. Bemish, 64 N.E.3d 923 (Ind. Ct. App. 2016).
[2] Biel, Inc. v. Kirsch, 161 N.E.2d 617, 618 (Ind. 1959) (emphasis added).
[3] Warner Trucking, Inc. v. Carolina Cas. Ins. Co., 686 N.E.2d 102, 105 (Ind. 1997)
This has been prepared for informational purposes only. It does not contain legal advice or legal opinion and should not be relied upon for individual situations. Nothing herein creates an attorney-client relationship between the Reader and Reminger. The information in this document is subject to change and the Reader should not rely on the statements in this document without first consulting legal counsel.
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