The Indiana Court of Appeals expanded potential liability for employers by finding that employers can be liable for the criminal conduct of former employees in the case of Santielli v. Rahmatullah (Ind. Ct. App. 4/4/2012).
What does this mean for you?
The Court set out the pertinent facts as follows:
“On October 16 or 17, 2005, Santelli was murdered in the course of a robbery at a motel owned by Rahmatullah. Santelli was a paying guest of the motel, living there while working on a construction project. Joseph Pryor, who had previously been employed at the motel as a general maintenance man, obtained a master keycard to the motel during his brief employment there and kept the keycard after he walked off the job. Rahmatullah’s manager at the motel did not perform a criminal background check on Pryor before hiring him. Pryor had an outstanding warrant for his arrest issued on September 21, 2005, for a probation violation.”
Pryor was subsequently convicted of murdering Santelli.
Later, Santelli’s estate sued Rahmatullah and Pryor. The main issue in this case was whether the jury would be required to apportion fault under Indiana’s Comparative Fault Rule, or whether the jury could find Rahmatullah and Pryor “joint and severally” liable.
Under the Comparative Fault framework, the jury assigns a percentage of fault to each party and that party is responsible for that percentage of the overall award. For example, if the total damages are $100,000 and Party A is 10% at fault and Party B is 90% at fault, then Party A owns the Plaintiff $10,000 while Party B owes Plaintiff $90,000.
So what happens if Party B doesn’t have any money or is judgment proof because he is serving a lengthy prison sentence? Party A is only responsible for $10,000 and the Plaintiff is stuck trying to collect the remaining $90,000 from a prison inmate.
On the other hand, if the liability is joint and several, Party A is responsible for the entire $100,000 and Party B is responsible for the entire $100,000. The plaintiff can collect from either party. If Party A has money to pay and Party B does not, the plaintiff can collect from Party A and make Party A worry about trying to get contributing funds from party B.
As you will see, the difference between Comparative Fault and Joint and Several liability was critically important to former employer Rahmatullah.
At the conclusion of the civil trial between Santelli’s estate and Rahmatullah, the jury was permitted, pursuant to Indiana’s Comparative Fault Act, to apportion liability as follows: 1.) 1% to Santelli; 2.) 2% to Rahmatullah; and 3.) 97% to Pryor. The net effect of the verdict was that the Estate of Santelli was forced to try to collect 97% of its award against Pryor who, while serving an 85 year sentence for murder, was most likely judgment proof. Under this framework, Rahmatullah was only responsible for 2% of the total damages.
On appeal, the Court of Appeals decided that instead of apportioning responsibility based upon the Comparative Fault Act, the liability between Rahmatullah and Pryor should be joint and several.
Under the theory of joint and several liability, instead of collecting 2% of the total award from Rahmatullah, the estate can collect 100% of the award. In this case, that award was just over 2 million dollars.
For employers this case means two things: First, failure to learn of an employee’s criminal history and subsequent failure to protect others can result in liability. Second, it is now possible for employers to be responsible for all of a former employee’s intentional conduct in the State of Indiana.