Strategies, Challenges, and Answers

Even Though An Employee Is A Supervisor, If Not A “Managing Agent”, Employer Not Liable For Punitive Damages For Employee’s Acts

security officer uniform shoulder patchA night of fun at the Gold Coast Hotel and Casino turned into a nightmare for Dedric Holman and Christina Edwards. The two were enjoying some gambling in the pre-dawn hours of February 19, 1994. Dedric was sitting at a blackjack table when Christina wandered off to try her luck elsewhere.

Christina happened to look much younger than her age, a fact that prompted a casino employee to ask for her identification. Perhaps feeling a bit flustered, Christina explained that she had forgotten it at work, and offered to go get it. This seemed to satisfy the employee, at least temporarily, and Christina went back to the blackjack table to ask Dedric for a ride.

Dedric, perhaps in the midst of a winning streak, agreed to take his girlfriend to get her ID, but only after he finished another hand of blackjack. It was then that things took a turn for the worse.

By now a security guard named John Nittinger had learned of the situation. He demanded that Christina show her ID. She explained that she was going to get it, but Nittinger wasn’t having it. He ordered her to leave the casino, using an expletive. This ignited Dedric’s anger. The two men exchanged heated words, and Nittinger repeated his request for the pair to leave.

Determined not to leave his winnings behind, Dedric gathered his chips and headed toward the cashier. That was when things got physical. Before it was over, Christina would be patted down and harassed about her interracial relationship with Dedric. Her boyfriend was subjected to a brutal beating and racial comments. Not exactly a typical trip to the casino.  Watching all this was Malloy, the Security Guard’s supervisor.  Malloy did nothing to stop the events from unfolding.

The opinion of Nittinger v. Holman, 119 Nev. 192, 69 P.3d 688 (2003) tells us that the jury awarded compensatory and punitive damages against the security guards and against the Gold Coast Casino.  The Casino appealed the $372,000 award of punitive damage against it.  The Casino argued that supervisor Malloy was not a “Managing Agent” as is required by Restatement (Second) of Torts, § 909(d) (1979) and Smith’s Food & Drug Centers v. Bellegarde, 114 Nev. 602, 610-11, 958 P.2d 1208, 1214 (1998).  The court said:

There is no evidence that Malloy had the authority to deviate from the established policy or that he had any discretion or could exercise his independent judgment. The evidence indicates that he merely had the authority to implement the Gold Coast’s policy and to see that the security guards enforced it. Therefore, he would not be classified as a managerial agent under section 909(d) of the Restatement (Second) of Torts so as to subject the Gold Coast to liability for punitive damages for his actions or inactions on the night in question.

The fact that Malloy was a supervisor was not enough to grant him that [managing agent] status.

119 Nev. at 198, 69 P.3d at 690.  Following the language in Steinhoff v. Upriver Restaurant Joint Venture, 117 F. Supp. 2d 598, 604-05 (E.D. Ky. 2000), the court explained that a “managerial agent must be of sufficient stature and authority to have some control and discretion and independent judgment over a certain area of [the] business with some power to set policy for the company.”  Malloy didn’t qualify.

For more information on whether the acts of an employee can give rise to punitive damages against the employer, see our prior post HERE and call Mike Mills at 702-240-6060×114 or email him at mike@mcmillslaw.com.  He will be glad to speak with you.

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Michael Mills About Michael Mills

Mr. Mills practices in the area of civil litigation and appeals, with particular experience in matters involving trucking liability, insurance defense, insurance coverage, premises liability, products liability and defense of personal injury. Mr. Mills is a member of the Trucking Insurance Defense Association, the Defense Research Institute Trucking Committee and the Nevada Motor Transport Association. Mr. Mills is licensed to practice before the Nevada Supreme Court and the Utah Supreme Court. He is also licensed to appear before the United States Supreme Court, the U.S. District Courts for the Districts of Nevada and Utah, as well as the U.S. Court of Appeals for the Ninth Circuit. Mr. Mills has created 3 Blogs for the benefit of the insurance industry. He serves as editor and publisher of the Nevada Insurance Law Blog, the Nevada Coverage and Bad Faith Blog and the Nevada Trucking Law Blog.

 
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