Northern District certifies negligence question to Indiana Supreme Court

An internal split within the Indiana Northern District Court over whether store managers may be held liable in certain negligence cases has prompted a federal judge to ask the Indiana Supreme Court for guidance.

Indiana Northern District Judge Holly Brady certified this negligence question to the state justices on Wednesday: May a plaintiff bring a claim in negligence against a store manager, not directly involved in the plaintiff’s accident, based on a delegation of the premises owner’s duties toward invitees, Indiana agency law, or any other legal principle? If so, what is the scope of that duty?

“In your average slip-and-fall case, which is almost always the context in which the issue arises, naming a store manager who had no actual involvement with the accident or injury confers no non-jurisdictional benefit on the plaintiff,” Brady wrote in David Branscomb, et al. v. Wal-Mart Stores East, LP, et al., 1:20-cv-213.

“The corporate defendants are collectible regardless of the judgment amount, either through their corporate coffers or their insurers. Moreover, there is no imaginable legal scenario where only the individual defendant, acting in the scope of their employment, would be liable to the plaintiff while his employer skated.

“This maneuver,” Brady said, “appears to be pure gamesmanship, enabled solely by the lack of on-point Indiana authority.”

At issue is a fact pattern the judge said is “neither complicated nor unique.” Plaintiff David Branscomb tripped and fell over a wood pallet at a Huntington Walmart store, then filed a negligence complaint in Huntington Circuit Court against Wal-Mart Stores East and store manager James Clark, who was not at the store at the time of the accident.

The defendants removed the case to the federal court in Fort Wayne, claiming fraudulent joinder of Clark. The plaintiffs, which also include Branscomb’s wife, responded by moving for a state-court remand.

The basis of the motion to remand is also the basis of what Brady described as “the federal apathy towards the joinder of big box store managers”: Antonio v. Wal-Mart, No. 1:07-cv-006-JDT-TAB, 2007 WL 28884371 at *7 (S.D. Ind. Sept. 27, 2007).

In Antonio, the Indiana Southern District Court identified two possible ways to hold a store manager liable in a negligence case: if the manager were an “officer of a corporation,” or if the duty of Walmart — which was also the defendant in Antonio — was delegated to the manager. Ultimately, the court remanded Antonio to state court based on the “unsettled nature of Indiana law.”

“This jurisdiction-defeating practice has now become commonplace; this opinion represents the third time in six months that this division has been forced to address the issue,” Brady wrote. “… On an issue as fundamental and potentially dispositive as jurisdiction, this collective federal shrug is frustrating, to say the least.”

Brady broke from the “jurisdiction-defeating practice” in February when ruling on another slip-and-fall case, Gunkel v. Crysler, No. 1:19-cv-499-HAB-SLC, 2020 WL 820881 (N.D. Ind. Feb. 18, 2020). There, she rejected the argument that the store manager could be held liable.

But three months later, Northern District Senior Judge William Lee took the opposite approach in Chandler v. Kohl’s Dept. Stores, Inc., No. 1:20-cv-85, 2020 WL 2190638 (N.D. Ind. May 6, 2020). Lee wrote that Brady’s decision in Gunkel “did not address what effect the defendant store’s delegation of its duties would have on the plaintiff’s claims against the store manager, nor did the opinion distinguish that case from Antonio, et al.”

“This Court has taken Judge Lee’s critiques to heart,” Brady wrote.

Explaining her rationale, Brady first wrote that a Walmart store manager cannot be a “corporate officer” based on the company bylaws and on the law in Delaware, where the company is based. And on the question of delegation, she noted that “(f)or more than a century, Indiana’s courts have held that an employer ‘cannot escape liability by delegating … to an agent’ the duty to maintain a safe workplace.”

“But more to the point, the concept of delegation of duty makes little sense when talking about an employer delegating to an employee,” she continued. “The raison d’etre of the delegation of duty is that it permits the delegator to avoid liability. … But that will never be the case in the employer-employee context; an employer will always be liable for the act of an employee performed in the course and scope of employment.”

Finally, Brady said she found no basis for store manager liability under the Restatement (Second) of Agency § 352. Under the comments of that section, she said any duty a store manager has to maintain a safe sales floor would be to his employer, not the customer.

“This situation has existed for more than a decade and is problematic,” Brady wrote. “The jurisdiction of a court should not vary based on the presiding judge. This is particularly true where, as here, an answer exists: a store manager either owes a duty to customers to prevent slip-and-fall accidents or he does not.

“This Court respectfully requests that the Indiana Supreme Court provide that answer,” she concluded. “The answer is potentially dispositive in this case and will provide a definitive answer going forward for dealing with an increasingly common jurisdictional issue.”

All briefing on the defendants’ motion to dismiss the case are stayed pending the outcome of Brady’s jurisdictional question.