§77.8 Statutory Basis to Impose Liability for Criminal Conduct of Another

The Case: Houghton v. Aramark Educational Resources, Inc., 90 S.W.3d 676 (Tenn. 2002).

The Basic Facts: Plaintiffs filed suit against Defendant daycare center on behalf of their daughter in federal district court. Plaintiffs asserted a cause of action based upon the theories of respondeat superior, negligent hiring and supervision, and statutory liability under applicable regulations and statutes after their daughter was allegedly sexually abused by an employee of the day care center.

The Bottom Line:

• "The certified question from the district court asks us to determine whether the rationale of statutorily imposed vicarious liability under Gleaves v. Checker Cab Transit Corp., 15 S.W.3d 799 (Tenn. 2000), applies to rules governing licensing and operation of day care centers in Tennessee." 90 S.W.3d at 676.
• "We are asked by the district court to construe regulations governing the licensure and administration of day care facilities, in light of our decision in Gleaves, namely, Rules 1240-4-3-.01, et seq., of the Tennessee Department of Human Services Social Services Division (DHS). These rules were enacted by the DHS pursuant to Tennessee Code Annotated sections 71-3-501, et seq., which vests the DHS with authority to license and regulate child care agencies. The regulatory language in Rule 1240-4-3-.02 cited in the federal district court's certification order provides the following definitions:

  (4) Central Operator -- The individual(s) . . . who . . . owns, administers, or operates a child care system. The central operators shall have ultimate responsibility for the administration/operation of any or all child care homes and child care centers in the system . . . .
  
  (20) Licensee -- The person . . . or entity to whom a license to operate a child care center is issued and who shall assume ultimate responsibility for the child care center.

  (emphasis added)." Id. at 679 (footnotes omitted).
• "The petitioners contend that these and other DHS regulations^FN2 require us to find Aramark vicariously liable for the criminal acts of Mr. Towery. Specifically, petitioners argue that under the rationale expressed in Gleaves, Aramark is vicariously liable for Mr. Towery's acts because DHS mandates that day care center licensees assume 'ultimate responsibility' for their facility.

  FN2 Other relevant provisions include: (1) Rule 1240-4-30.01(2), which provides that the purpose of licensing is for the 'protection of children. These minimum requirements seek to maintain adequate health, safety, and supervision of children while in child care;' (2) Rule 1240-4-3-.07(1)(a), which states that '[t]he board, owner, applicant/licensee, or other designated agent of the child care center shall be responsible for selecting individuals of suitable character to work with children;' (3) Rule 1240-4-3-.07(1)(b), which provides that '[t]he director, with the guidance of the board or owner of the center, shall be responsible for staff and program and the day-to-day operation of the center;' and (4) Rule 1240-4-3-.10(5)(a), which requires employees to undergo specialized training to prevent and report incidents of child abuse. Specifically, it states that '[s]uspected child abuse or neglect shall be reported immediately to the local Department of Children's Services office by the staff of the child welfare agency.'"

  Id . at 680.
• "After conducting a thorough review of relevant DHS regulations, we find no intent on the part of DHS to alter, amend, or otherwise contravene the common law relating to vicarious liability." Id. at 681.
• "We conclude that applicable DHS regulations do not, in the absence of fault on the part of a licensee, provide a basis for vicarious liability for the criminal acts of an employee that occur outside the scope of employment." Id.