In the wake of a tragic death, a private beach club survives a claim of vicarious liability.
As a general rule, under the theory of vicarious liability, an employer is held liable for the actions of his or her employees that are within the scope of their employment. Since vicarious liability holds the employer liable even in situations in which the employer did nothing to aid or encourage the negligent conduct, the question of what activities are within a person's scope of employment is usually among the key issues considered by the courts. A good example of how the courts examine vicarious liability is Harlan Baus v. David Lowe and Clarkwood Beach Club [2007 Ohio App. LEXIS 250.] Clarkwood Beach Club Inc. is a nonprofit corporation organized under Ohio law for the stated purposes of owning and maintaining a parcel of beachfront property abutting Lake Erie in Euclid, Ohio. The property consists of a party area containing an open-air pavilion, rest-room facilities and permanent grills. Downhill from this area, people may access a beach frontage that is also owned by Clarkwood. The parcel of property extends to the shoreline of Lake Erie, where there are no structural improvements such as boat docks or a pier extending from the beachfront into the lake. On Aug. 12, 2001, Clarkwood member Paul Adams hosted a party for friends and patrons of the Village Bar, a Euclid tavern that he owns. David Lowe, an acquaintance of Adams who frequented the bar, received permission from Adams to drive a 26-foot Trojan cabin cruiser to the waters adjacent to the Clarkwood property, where he would take willing party attendees water skiing. Lowe and his two sons arrived on his boat at approximately 7 p.m. He anchored about 25 yards offshore and waded onto the Clarkwood beach. At around 8 p.m., he began to take Adams' guests water skiing. One of the guests, Carol Patch, declined the invitation to ski, and Adams decided to go in her place. As Lowe drove his boat along and/or toward the Clarkwood property, Patch and another party guest, 10-year-old Samantha Trommeter, were waist deep in the lake approximately 10 to 15 yards off shore. Lowe, looking back at Adams as he skied, drove his boat directly toward them. Patch and Trommeter tried to get his attention, but were unsuccessful. Although Patch was able to throw Trommeter aside, she was unable to avoid the boat herself and was fatally wounded by the boat's propeller. Euclid police administered a field sobriety test to Lowe, which he failed. He was arrested and ultimately pleaded guilty to the criminal charges of attempted involuntary manslaughter and reckless operation of a vessel. In addition, Harlan Baus, Patch's uncle and the administrator of her estate, filed a civil lawsuit against Clarkwood and various other individuals, alleging wrongful death, premises liability and negligence. After reviewing the facts, the trial court granted Clarkwood's motion for summary judgment and dismissed the case. Baus appealed the trial court's decision to the Court of Appeals of Ohio, Eighth Appellate District, arguing that the trial court misapplied the law when it found no liability on the part of Clarkwood. In particular, Baus argued that under vicarious liability, Clarkwood was liable for the actions of Lowe because Adams, a member of Clarkwood, authorized Lowe to operate the boat. Baus also argued that Adams failed to investigate whether Lowe was intoxicated beforehand and, assuming that he noticed Lowe's condition, failed to stop him from operating his boat. The Court of Appeals agreed with Baus that if an act of negligence is committed in accordance with the express orders of a corporate officer or agent carrying out corporate policy, the corporation is as liable as the corporate officer who ordered the wrongful conduct. But the court also determined that there was no evidence that Adams' actions were within the scope of his relationship with Clarkwood. In support of this position, the court noted that there was nothing in the regulations for the formation of Clarkwood that governs or mentions boating, or gives any club member the authority to control anything that happens on the water - the property owned by the club extends only to the shoreline of the lake. Therefore, the court ruled that Clarkwood could not be held liable for any negligence committed in or on the water. As for Adams' actions, the court ruled that since he would have been acting outside the scope of Clarkwood's regulations if he authorized any non-member third party to conduct any boating operations on the waters of the lake itself, any negligence attributed to him would open only him to personal liability. Since Clarkwood could only be subject to potential liability for Adams' actions or negligent permissiveness if he allegedly committed a tort as a corporate officer or agent carrying out corporate policy, the corporation could not, as a matter of law, be liable in this case. Baus' second argument was that Clarkwood, acting through Adams, had a duty to ensure that Lowe operated his boat in a safe manner, and that his failure to do so opened the corporation up to liability. In rejecting this argument as well, the court ruled that Clarkwood, through Adams, could neither permit nor forbid the boating activity since it occurred in public waters. Finally, Baus argued that Clarkwood harbored liability for Adams' alleged negligence on the theory that Clarkwood was a social host of Patch on the night of her death - and, as such, could be held liable for Adams' or Lowe's wrongful conduct. Assuming that Clarkwood was a social host to Patch, the court noted that social-host liability begins with the determination that the host owned and controlled the property upon which his guest was injured. Since Patch was killed in the water, off the premises owned and controlled by Clarkwood, the court determined that Clarkwood could not be liable for Patch's death. While most recreational facilities do not have to worry about boating accidents, the refusal of the Court of Appeals to find the Clarkwood Beach Club vicariously liable for the actions of Lowe can be instructional for all organizations. For example, the court made it clear that before vicarious liability can be applied, the injured party must show that the actions that caused the accident were within the scope of the employment relationship, and the result of those actions clearly foreseeable. Employers and organizations, the court held, should not be liable for those actions, intentional or not, over which employers have no control.