Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—Ky. App.: Domino’s Pizza franchisor not liable for fleeing robber’s actions, (Aug 22, 2016)

By Greg Hammond, J.D.

Domino’s Pizza, LLC was not liable for the death of an individual that occurred after a robber fled a Domino’s franchise, a Kentucky state appellate court has decided. An employee’s act of leaving the back door open so she could smoke, the store being open late, and the store operating primarily in cash, were not acts under Domino’s day-to-day control for the franchisor to be liable under a vicarious liability theory, the court concluded. The trial court’s order granting summary judgment in favor of Domino’s was therefore affirmed (Johnson v. Seagle Pizza, Inc., August 19, 2016, Clayton, D.).

Vicarious-franchisor-liability. The victim’s son claimed that Domino’s was liable for wrongful death and negligent infliction of emotional distress under a vicarious-franchisor-liability theory. In particular, the plaintiff claims that Domino’s, as franchisor, was negligent regarding the instrumentalities over which it retained the right of control, including: (1) Domino’s security procedures and equipment relating to the back door; (2) Domino’s procedures relating to the handling of cash; and (3) Domino’s choice of very late operating hours for the store.

The court rejected the plaintiff’s arguments, finding first that the act that led to the death was a third-party’s intentional act, which Domino’s had no control over. Further, even if the court viewed the proximate cause element broadly, as the plaintiff claimed—that it was a combination of the employee’s act of leaving the back door open so she could smoke, the store being open late, and the store operating primarily in cash—these acts were not under Domino’s day-to-day control. Rather, it was undisputed that the franchisee alone executed the lease agreement, had the facilities built, hired its employees, supervised its employees, maintained control of its premises, set its prices, implemented its policies, and maintained its own security. Without control over the day-to-day operation of the franchisee, Domino’s could not be liable under a vicarious-franchisor-liability theory. The trial court’s order granting summary judgment to Domino’s was therefore affirmed with regard to the franchisor.

Franchisee, property owner liability. The trial court’s order, however, was reversed and remanded with regard to the franchisee and property owner. The appellate court concluded that the trial court abused its discretion by prematurely granting summary judgment and not permitting the plaintiff to conduct discovery. Viewing the evidence in the light most favorable to the plaintiff , the court concluded that the facts, as pleaded, left the court with doubt as to whether a shooting death by a fleeing robber many yards away from the franchisee was a reasonably foreseeable result of any of the franchisee’s, property owner’s, or employee’s negligent acts. The court also questioned whether the defendants even had a duty to attempt to warn or protect the plaintiff from the fleeing robber or put into place security measures to prevent the incident. Those doubts, according to the appellate court, could not be resolved without further factual development in discovery.

In particular, the court noted that the franchisee and property owner may have been put on notice that a violent crime was reasonably foreseeable due a history of shootings and armed robberies in the area. By prematurely granting summary judgment, "we can only speculate about the facts underlying the murder’s foreseeability," the court stated.

The case is No. 2015-CA-000085-MR.

Attorneys: Joseph T. Pepper for Harold Dean Johnson, Jr. Paul T. Lawless (Bell, Orr, Ayers & Moore, PSC) for Seagle Pizza, Inc., Domino’s Pizza, LLC, and Domino’s Pizza Franchising, LLC.

Companies: Seagle Pizza, Inc.; Domino’s Pizza, LLC; Domino’s Pizza Franchising, LLC

Cases: FranchisingDistribution KentuckyNews