
    Melissa Ann WRIGHT, court appointed guardian of Brogan Zane Wright; Karen Reiger; and Mike Reiger, Plaintiffs, v. WATKINS AND SHEPARD TRUCKING, INC., a Montana corporation; Gregory Andrew Britt, an individual; Does 1 through 5 and Roes 1 through 5, Defendants.
    No. 2:11-CV-01575-LRH-GWF.
    United States District Court, D. Nevada.
    Sept. 18, 2013.
    Order Denying Reconsideration Oct. 10, 2013.
    
      Chris R. McCullough, Frank Perez, McCullough, Perez & Associates Ltd., Las Vegas, NV, for Plaintiffs.
    Holly S. Parker, Steven E. Guinn, Lax-alt & Nomura, Ltd., Reno, NV, for Defendants.
   ORDER

LARRY R. HICKS, District Judge.

This is a motor vehicle negligence case. Before the court is defendants Watkins and Shepard Trucking, Inc. (‘Watkins & Shepard”) and Gregory Britt’s Motion for Partial Summary Judgment (# 38 ). Plaintiffs Melissa Ann Wright, Karen Reiger, and Mike Reiger have responded (# 41), and Defendants have replied (# 45).

I. Facts

Defendant Britt hit Brogan Zane Wright with his semi-truck on June 5, 2011, just outside of Alamo, Nevada. The accident occurred on U.S. Highway 93, a two-lane highway, around 9:25 p.m. Wright’s truck had broken down as he was headed north, and he had pulled over to the righthand shoulder. He had turned his emergency lights on, and he then called his uncle, plaintiff Mike Reiger, for assistance.

Reiger soon arrived with Wright’s grandmother, plaintiff Karen Reiger, parking his truck and flatbed trailer in front of Wright’s truck along the highway’s northbound shoulder. Reiger also turned on his emergency lights. The three relatives walked from Reiger’s truck towards Wright’s truck, heading south and facing on-coming northbound traffic. Wright was walking about two feet into the northbound travel lane, while his relatives walked along the shoulder.

Britt was traveling southbound in what the parties agree was the course and scope of his employment with Watkins & Shepard. The night was moonless and the stretch of highway, dark. As Britt neared Wright’s truck, he was stuck behind a slow-moving SUV. Britt saw a truck’s flashing headlights, and, recognizing the truck to be parked on the shoulder, began passing the SUV by moving into the northbound lane.

As he passed the SUV, Britt saw Wright only too late. Britt’s driver’s-side mirror struck Wright in the back of his head, causing severe injuries. Mike and Karen Reiger were injured by flying debris.

II. Discussion

Plaintiffs allege claims of negligence, negligent infliction of emotional distress, and negligent hiring and supervision against Defendants. Discovery closed in November 2012, but the court reopened discovery in response to an anonymous letter Plaintiffs had received regarding Watkins & Shepard’s hiring practices. In light of the reopened discovery, the court now denies Defendants’ Partial Motion for Summary Judgment without prejudice.

However, the parties dispute one matter of law requiring no factual development: under Nevada law, may a plaintiff recover on claims against an employer under both a theory of respondeat superior and a theory of negligent hiring and supervision when the employer admits that the employee was acting within the course and scope of his employment? It is to this question the court now turns.

Defendants argue that Plaintiffs may not recover on a theory of derivative liability (respondeat superior) and on a theory of direct liability (negligent hiring) against Watkins & Shepard. In support, they cite Cruz v. Durbin, 2011 WL 1792765 (D.Nev. May 11, 2011). There, the defendant collided with the plaintiff as the plaintiff was pulled over to the side of the road in order to repair his truck. 2011 WL 1792765 at *1. The court answered the question as to “whether a negligent hiring and training claim adds anything to a direct negligence claim after the employer admits the employee was acting under the scope of his employment” with a clear “no.” Id. at *3. Predicting that the Nevada Supreme Court would do likewise, the court concluded, “Most of the courts to address the question have noted that the bar to a negligent hiring or training action after an employer admits the employee was acting within the scope of employment (‘the McHaffie rule’) is the majority rule.” Id. (citing McHaffie v. Bunch, 891 S.W.2d 822, 826 (Mo.1995)).

In McHaffie, the Court advanced three rationales for its “rule.” First, where derivative liability is established, “the evidence submitted to establish [direct liability] serves no real purpose.” McHaffie, 891 S.W.2d at 826. Second, such evidence may be “inflammatory” and will almost certainly be “irrelevant.” Id. Third, other avenues — like punitive damages claims— will provide a route for recovery in the event an employer’s culpability exceeds that of its employee’s imputed negligence. Id.

These rationales are persuasive, but they overlook the irreducible proposition that the doctrine of vicarious liability and the tort of negligent hiring and supervision address different conduct. The first addresses the conduct of the employee and the second addresses the conduct of the employer. More importantly, each theory of liability is motivated by different concerns. The doctrine of vicarious liability restricts employer liability to employee conduct that “should be considered as one of the normal risks to be borne by the business.” Restatement (Second) of Agency § 229 comment a (1958). This is the meaning of the “in the course and scope of employment” requirement. See, e.g., Eric A. Posner & Alan 0. Sykes, An Economic Analysis of State & Individual Responsibility under International Law, 9 Am. L. & Econ. Rev. 72, 81-82 (2007). The tort of negligent hiring and supervision creates employer liability when the employer exacerbates the “normal risks to be borne by the business” through the employer’s own negligence. Thus, each theory of liability aims at different risky conduct: vicarious liability makes the employer responsible for the normal risks of doing business, while the tort makes the employer responsible for any abnormal risks that she herself creates.

To be sure, each theory of liability addresses similar conduct. But not identical conduct: an employer who knowingly employs a reckless machine operator creates a risk that is not a “normal” one, and therefore this risk is not addressed by the theory of vicarious liability. Thus, it is not true (at least under Nevada law) that “the evidence submitted to establish [direct liability] serves no real purpose” where the plaintiff also pursues recovery under a theory of respondeat superior. See McHaffie, 891 S.W.2d at 826; see also James v. Kelly Trucking Co., 377 S.C. 628, 661 S.E.2d 329, 330-32 (2008) (rejecting McHaffie). Rather, in this circumstance “the cause of action against the employer is no longer simply derivative of, or dependent upon, the negligence of the employee.” James v. Kelly Trucking Co., 377 S.C. 628, 661 S.E.2d 329, 333 (2008) (Moore, J., dissenting). The McHaffie Court’s second rationale, that the evidence used to establish direct liability may taint the jury’s judgment with respect to vicarious liability, is a practical concern meriting careful evidentiary stewardship. It is not, however, a concern that merits the elimination of a cause of action. As the James Court found, “In our view, the argument that the court must entirely preclude a cause of action to protect the jury from considering prejudicial evidence gives impermissibly short-shrift to the trial court’s ability to judge the admission of evidence and to protect the integrity of trial, and to the jury’s ability to follow the trial court’s instructions.” Id. at 331. Finally, the McHaffie Court found that punitive damages claims could provide for recovery in the event an employer’s culpability exceeds that of its employee, eliminating the need for direct liability. But this rationale does not wash in Nevada, where punitive damage claims require clear and convincing evidence, but a civil tort requires only proof by preponderance. See Bongiovi v. Sullivan, 122 Nev. 556, 138 P.3d 433, 450 (2006). Therefore, a punitive damages claim is not a ready substitute for the tort of negligent hiring and supervision.

These considerations imply that the Nevada Supreme Court would not adopt the “majority” approach as set out by McHaffie. See Candelaria Industries v. Occidental Petroleum Corp., 662 F.Supp. 1002, 1004 (D.Nev.1984) (predicting how the Nevada Supreme Court would rule in order to determine an issue of Nevada law). Accordingly, Defendants are not entitled to summary judgment on Plaintiffs’ negligent hiring and supervision claim.

IT IS THEREFORE ORDERED that Defendants’ Partial Motion for Summary Judgment (# 38) is DENIED without prejudice.

IT IS SO ORDERED.

ORDER

Before the Court is Defendants Watkins and Shepard Trucking, Inc. (“Watkins & Shepard”) and Gregory Andrew Britt’s (“Britt”) Motion for Reconsideration, or in the alternative, Motion to Certify Question of Law to the Nevada Supreme Court. Doc. # 72. Also before the Court is Defendants’ Ex Parte Motion to Shorten Time for Briefing and Decision on the aforementioned Motion. Doc. # 73.

I.Factual Background

This is a personal injury action arising out of a tractor trailer truck accident on June 5, 2011, in which Plaintiff pedestrians sustained severe injuries. Plaintiffs allege claims of negligence, negligent infliction of emotional distress, and negligent hiring and supervision against employee/driver Britt and employer Watkins & Shepard. On December 10, 2012, Defendants filed a Motion for Partial Summary Judgment (Doc. # 38), seeking dismissal of Plaintiffs’ claims against Watkins & Shepard for negligent hiring and supervision. On May 16, 2013, the Court reopened discovery in response to an anonymous letter Plaintiffs received regarding Watkins & Shepard’s hiring practices. See Doc. # 59. On that basis, the Court denied Defendants’ Partial Motion for Summary Judgment without prejudice. See Doc. # 69. On October 4, 2013, Defendants filed the present Motions before the Court.

II. Legal Standard

Pursuant to Federal Rule of Civil Procedure 54(b), the Court has authority to reconsider, modify, alter, or revoke any order adjudicating fewer than all the claims in an action at any time before the entry of final judgment. See United States Aviation Underwriters, Inc. v. WesAir, LLC, No. 2:08-CV-00891-PMP-LRL, 2010 WL 1462707, at *1-2, 2010 U.S. Dist. LEXIS 35648, at *4 (D. Nev. April 12, 2010); see also United States v. Martin, 226 F.3d 1042, 1048-49 (9th Cir.2000). “Reconsideration is appropriate if the district court (1) is presented with newly discovered evidence, (2) committed clear error or the initial decision was manifestly unjust, or (3) if there is an intervening change in controlling law.” Aviation Underwriters, 2010 WL 1462707, at *2, 2010 U.S. Dist. LEXIS, at *4 (quoting Sch. Dist. No. 1J v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir.1993)) (internal quotation marks omitted). However, “[a] motion for reconsideration is not an avenue to re-litigate the same issues and arguments upon which the court already has ruled.” Id. (quoting In re AgriBioTech, Inc., 319 B.R. 207, 209 (D.Nev.2004)) (internal quotation marks omitted) (emphasis added).

III. Discussion

The Court finds that reconsideration of its September 13, 2013 Order (Doc. # 69) is not warranted. The Court’s Order was not clearly erroneous under controlling Nevada law, nor has there been an intervening change of law such that the Court would reach a different conclusion. To the contrary, the Court’s opinion as to Plaintiffs’ cause of action against Watkins & Shepard for negligent hiring and supervision appears to be exactly in line with what Defendants refer to as the “majority” position in Nevada and the rest of the country for that matter. Moreover, Defendants have presented no new evidence since the September 13, 2013 Order was issued. The Court reopened discovery on the very issue of negligent hiring and supervision in order to give Plaintiffs an opportunity to produce evidence relevant to punitive damages on that claim. See Doc. # 59. Should the evidence reveal that Plaintiffs’ claim of negligent hiring and supervision is without merit, the Court invites Defendants to resubmit their Motion for Partial Summary Judgment on this claim. Until that time, the Court finds that no other changed circumstances would render this issue appropriate for reconsideration and no manifest injustice would otherwise fall upon Defendants.

To the extent the Court’s Order was unclear as to Plaintiffs’ claim for negligent hiring and supervision as it relates to punitive damages or “predicted” that the Nevada Supreme Court would not adopt the “majority” position, the Court modifies its September 13, 2013 Order as set forth herein. The Court agrees with Defendants and the apparent “majority” that Plaintiffs may not maintain a direct cause of action for negligent hiring and supervision where it would impose no additional liability on Defendants because Watkins & Shepard has already admitted vicarious liability. Indeed, in those circumstances, Plaintiffs claim for negligent hiring and supervision would merely be an alternative theory on which to recover against Watkins & Shepard for Britt’s alleged negligence, and thus entirely superfluous. As such, the Court finds it unnecessary to expound further on this general principle.

However, this is not a case in which the “majority” rule can be mechanically applied to dispose of Plaintiffs’ claim for negligent hiring and supervision. In this regard, Defendants miss the mark entirely. Here, there is not “only one element of damages that Plaintiffs may recover” for which “Watkins & Shepard has admitted all the elements necessary to establish its complete liability.” See Doc. #72, p. 12. Nor does Plaintiffs’ “direct negligence claim therefore [serve] no purpose” as Defendants urge. See Doe. # 72, p. 15. Rather, Plaintiffs’ direct negligence claim against Watkins & Shepard for negligent hiring and supervision stands to impose liability beyond that which is available on the underlying derivative negligence claim. Thus, it merits full consideration separate and apart from Watkins & Shepard’s vicarious liability for Britt’s negligence to determine whether Plaintiffs’ request for punitive damages is viable.

Defendants cite to Olivarez v. Rebel Oil Co., Inc., Case No. A430209 (Nev. Dec. 30, 2002), in the Eighth Judicial District of Nevada for the proposition that the trend in Nevada appears to be in line with the “majority” approach. Doc. # 72, Ex. 1. The Court agrees. However, Defendants neglected to reference the portion of that order which is directly relevant to this case. Specifically, the court stated that “the exception to the general rule where a plaintiff has a claim for punitive damages against the employer based on its independent negligence in hiring and retaining the employee is not applicable, because the Court has dismissed Plaintiffs’ punitive damages claim pursuant to NRS 41.085(5).” Id. Although inapplicable on other grounds, the Nevada court acknowledged precisely the exception on which this Court based its denial of Defendants’ Motion for Partial Summary Judgment. Similarly, Defendants cite Adele v. Dunn, No. 2:12-CV-00597-LDG-PAL, 2013 WL 1314944, 2013 U.S. Dist. LEXIS 44602 (D.Nev. March 27, 2013), in which Judge George predicted that Nevada would adopt the “majority” position. Again, however, this case is distinguishable because it dealt with a situation in which “the direct claim of negligent entrustment, or negligent training, serve[d] only as [an] alternative theor[y] by which to impute liability to an employer for the acts of the employee.” Id. at *2, 2013 U.S. Dist. LEXIS 44602 at *5. Here, Plaintiffs’ direct claim against Watkins & Shepard does not rest solely upon Britt’s alleged negligent conduct. Rather, Watkins & Shepard faces additional liability beyond that imputed to it by virtue of Britt’s negligence. Perez v. Kriegh, Case No. A516240 (Nev. Mar. 6, 2008), is similarly inapposite as punitive damages were not at issue.

To ensure that Defendants are entirely clear on the Court’s agreement with the weight of authority on this issue, the Court has reproduced the relevant section of Cruz v. Durbin, on which Defendants rely:

The purpose of the McHaffie rule is to prevent unnecessary litigation over claims that have become redundant due to a factual admission by one party and to avoid the admission of irrelevant, prejudicial material. The purpose of the rule is not furthered by dismissing an allegedly redundant claim ... where liability on the allegedly redundant claim would support an additional measure of damages that liability on the other claim alone would not support. The McHaffie court itself noted that it was not instituting an absolute rule, and that a case could present itself in the future where both types of claim could proceed:
[I]t may be possible that an employer ... may be held liable on a theory of negligence that does not derive from and is not dependent on the negligence of an ... employee. In addition, it is also possible that an employer ... may be liable for punitive damages which would not be assessed against the employee.

No. 2:ll-CV-00342-RCJ-LRL, 2011 WL 1792765, at *3-4, 2011 U.S. Dist. LEXIS 51057, at *9-10 (D.Nev. May 11, 2011) (citing McHaffie v. Bunch, 891 S.W.2d 822, 826 (Mo.1995)) (internal citations omitted). The court went on to say that “[i]f Plaintiff amended the AC to request punitive damages, ..., the outcome would be different, because an employer’s fault in hiring and training is different from an employee’s fault in driving.” Id. at *4, 2011 U.S. Dist. LEXIS 51057 at *10-11 (citing NRS 42.005; Wyeth v. Rowatt, 244 P.3d 765, 783 (Nev.2010)).

Defendants also cite a persuasive law review article on the subject that explicitly carves out an exception to the “majority” rule for viable claims of punitive damages. See Doc. # 72, at 6 (citing Richard A. Mincer, The Viability of Direct Negligence Claims Against Motor Carriers in the Face of an Admission of Respondeat Superior, 10 Wyo. L.Rev. 229 (2010) (hereinafter “The Viability of Direct Negligence Claims ”)). While Mincer warns that the punitive damages exception is more theoretical than practical, he concedes that “even the theoretical deserves a court’s attention to determine whether or not the plaintiffs punitive damages claim is viable or should also be dismissed.” Id. at 263. Indeed, it may be rare that an employer’s actions in hiring, training, supervising, or retaining an employee are egregious enough to warrant punitive damages. Nevertheless, the Court is simply not prepared to foreclose the possibility that Plaintiffs’ claim has merit without the appropriate factual analysis. Accordingly, Defendants’ Motion to Reconsider is denied.

As previously mentioned in its September 13, 2013 Order, the Court is cognizant of Defendants’ concern that the evidence used to establish direct liability for negligent hiring and supervision, namely an employee’s prior conduct amounting to negligence, may be misused by the trier of fact to establish the employee’s negligence on the occasion in question. Indeed, Judge Reed acknowledged precisely this problem in Grimes v. Combined Transp., Inc., Case No. 3:05-CV-00461-ECR-RAM (D.Nev. Oct. 3, 2007), Doc. # 92, p. 7-11. Nevertheless, Grimes, like every other case Defendants cite, is distinguishable on the grounds that the plaintiffs’ direct liability claim added nothing to the case in terms of recovery and was thus unnecessary. Id., p. 11. Should Plaintiffs’ present sufficient evidence to pursue an award of punitive damages against Watkins & Shepard for negligent hiring and supervision, the Court is confident that it would-be capable of managing the complex evidentiary issues presented. In fact, in The Viability of Direct Negligence Claims, Mincer suggests that “[where] the Plaintiff presents facts that support a claim for punitive damages ..., then the case should be bifurcated to ensure the defendant receives a fair trial on the underlying negligence claim against the driver. If — and only if — the driver is found negligent should the trial proceed to the second phase where the plaintiff is given a fair opportunity to present the claim for punitive damages.” The Viability of Direct Negligence Claims, at 263-64. The Court will assuredly give heed to Mincer’s suggestion in the event the parties reach trial on the issue of punitive damages.

Finally, as the Court hopes to have made abundantly clear, the question this Court addressed in its September 13, 2013 Order (Doc. # 69) is not presently before the Nevada Supreme Court. Punitive damages are simply not at issue in Plat v. Eighth Judicial District Court. Accordingly, the Court denies Defendants’ Motion to Certify Question of Law to the Nevada Supreme Court. The Court also denies Defendants’ request to present this matter to the Court in oral argument. Lastly, the Court denies as moot Defendants’ Ex Parte Motion to Shorten Time for Briefing and Decision on Motion to Reconsider or Certify Question of Law to the Nevada Supreme Court.

IT IS THEREFORE ORDERED that Defendants’ Motion to Reconsider or Certify Question of Law to the Nevada Supreme Court (Doc. # 72) is DENIED.

IT IS FURTHER ORDERED that Defendants’ Ex Parte Motion to Shorten Time for Briefing and Decision on Motion to Reconsider or Certify Question of Law to the Nevada Supreme Court (Doc. # 73) is DENIED.

IT IS SO ORDERED. 
      
      . Refers to the court’s docket entry number.
     
      
      . Plaintiffs originally asked the court to "stay adjudication” on Defendants' Partial Motion for Summary Judgment, but given the likelihood that the extended discovery may result in additional evidence relevant to Defendants’ Motion, denial with leave to refile is the most efficient course.
     
      
      . Refers to the Court's docket number.
     
      
      . Nevada Revised Statute 41.085(5) provides, in relevant part, "[t]he damages recoverable by the personal representatives of a decedent on behalf of the decedent’s estate include ... [a]ny penalties, including, but not limited to, exemplary or punitive damages, that the decedent would have recovered if the decedent had lived ...”
     
      
      . Defendants reproduce Perez at Doc. # 72, Ex. 1.
     
      
      . Defendants reproduce the Petition for Writ of Mandamus in Plat at Doc. # 72, Ex. 7.
     