West Virginia Supreme Court Finds That Company Whose Employee Started Hotel Fire Is Not Liable

1319309_cigarette_1.jpgRecently, the West Virginia Supreme Court ruled that a construction company was not liable for a fire in a hotel started by an employee who was off duty. The incident occurred back in November 2010, when Robert Harris, a Powell Construction Company employee, dropped his cigarette in his room at Aracoma Hotel and started a fire. Because Harris was from out of state, he needed to stay in the hotel overnight in order to work on a company project in West Virginia.

Evanston Insurance Company, the Aracoma Hotel’s insurance carrier, was forced to pay over one million dollars for the damage caused. This led Evanston to file claims against Powell Construction Company in Logan County Circuit Court, charging it with “respondeat superior” — that is, vicarious liability — and negligent hiring. Evanston argued that Powell Construction Company should have seen that Harris had “certain propensities,” such as a criminal record and a history as a recovering addict, that made it foreseeable he could cause damage.

The Logan County Circuit Court granted Powell Construction’s motion to dismiss, stating that in order for the company to be liable, Harris would have to actually hold himself out as an agent of Powell Construction and to have caused the fire as part of his job duties, within the scope of his employment. Just being at the hotel while an employee of Powell Construction was not enough. Likewise, the circuit court found that Harris’s history with drugs and alcohol were not the cause of his dropped cigarette and thus the accident was not foreseeable when Powell Construction hired him.

Evanston petitioned the Supreme Court, arguing that the circuit court committed several errors in reaching its decision, including (1) granting the motion to dismiss when the claims were sufficient to withstand one, (2) finding that Evanston failed to state sufficient facts to support its claim of respondeat superior, and (3) finding that Evanston failed to state a claim of negligent hiring. Evanston argued that its claims were sufficiently stated because West Virginia is a notice pleading state, which means the threshold for stating a plausible claim is fairly low. Notice pleading merely requires “a short and plain statement of the claim showing that the pleader is entitled to relief,” as opposed to a higher threshold articulated by the United States Supreme Court in Bell Atlantic Corp. v. Twombly, which required that a claim meet a “plausibility” standard. Under the “plausibility” standard, the complaint must provide “enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of illegal agreement.” Though some states have adopted the Twombly standard, West Virginia is not among them.

The West Virginia Supreme Court reviewed the Logan County Circuit Court’s decision and, finding it to be well reasoned, affirmed it.

The situation is important for West Virginia property damage attorneys to note. Even though we live in a notice pleading state with a presumably low threshold, we should still make sure that there are sufficient facts to meet each claim. Respondeat superior, in particular, is very specific and can be difficult to meet if there are no facts suggesting that the employee’s bad behavior took place within the course of his employment.