Tort Liability of Agents and Principals

Question 1

Question #3 (AICPA.081940REG-2A.3)
Seifert (P) is driving on a toll road in New York and exits. She throws her usual 50 cents into the basket and proceeds to drive away when she hears yelling. She quickly realizes that, on this day, she has driven beyond her usual exit and, therefore, owes more money. She is backing up to apologize and pay the difference when she is confronted by the toll collector, LaBelle, who has left the toll booth and repeatedly punches P in the face. P sues LaBelle’s employer, the Turnpike Authority (D), for assault and battery. D proves that it has instructed its employees never to hit customers. Which of the following is true?

A.  D is not liable, because LaBelle acted against explicit instructions.
B.  The Authority is liable, because LaBelle was acting within the scope of his employment to benefit the Authority.
C.  Neither A nor B.
D.  A and B.

Answer 1

B. The Authority is liable, because LaBelle was acting within the scope of his employment to benefit the Authority.

This is an agent trying to do her job in order to benefit her boss, but doing so in a wrongful manner. Because she is within the scope of employment, albeit aiding the boss in a wrongful manner and likely in disregard of instructions, the boss is liable, so this is the correct choice.

Wrong Answer

A. D is not liable, because LaBelle acted against explicit instructions.

When agents attempt to advance their principal’s interest, even if in a wrongful manner and contrary to instructions, the principal is usually liable for the agent’s torts.