Riley v. Keenan, A-6054-06T3; Appellate Division; opinion by Parrillo, J.A.D.; decided and approved for publication April 2, 2009. Before Judges Axelrad, Parrillo and Messano. On appeal from the Law Division, Camden County, L-1839-03 and L-4892-03. DDS No. 31-2-3313 [30 pp.]

This matter arises from an automobile accident wherein John Keenan, while intoxicated, crashed into a car driven by Laurie Riley and occupied by her future husband, Gregory Riley. The Rileys both suffered injuries, Laurie’s resulting in permanent disability.

In addition to seeking dram shop liability against two taverns, Naylor’s Liquor & Bar and Farrell’s American Bistro, the Rileys brought an action against Keenan and Keenan’s employer, Glenn Habina & Sons Inc. The claim against Habina was brought on the theory that Keenan suffered sleep deprivation as a result of the hours Habina required him to work, and that Keenan’s reckless driving, even though outside the scope of his employment, was a foreseeable risk of work fatigue.

Following the exclusion of plaintiffs’ fatigue expert’s opinion as a net opinion, the action against Habina was dismissed on summary judgment. A jury subsequently returned a verdict of more than $3 million against the remaining defendants, apportioning liability 55 percent to Keenan and 22.5 percent to each tavern.

On appeal, plaintiffs argue error in the summary judgment dismissal of their claim against Habina. In its cross-appeal, Farrell’s contends the court erred in denying its motion for judgment notwithstanding the verdict. Farrell’s also seeks reversal or remittitur of the damages award as excessive, as does Keenan.

Held: Even assuming the employee’s work-related sleep deprivation, as claimed by plaintiff, there is no reason to extend the notion of duty to, or create a new theory of liability against, an employer where the employer neither knew nor had control over its employee’s “incapacity,” nor engaged in any affirmative act to worsen the situation, and where the independent intervening act of the employee’s intoxication broke any causal connection between work fatigue and the ensuing automobile accident.

For liability to attach to an employer based on work-related fatigue of its employee, there must be a duty owed to a third party injured by conduct of an employee outside the scope of his or her employment, and a breach of that duty. The theory of recovery proposed by plaintiff here is not one of vicarious or imputed liability. Plaintiff seeks to impose direct liability on the employer for the negligence of an employee committed outside the workplace and not in the course of employment. Plaintiff offers, however, no insight as to when the duty arises, to what extent it runs, what it entails or where the line should be drawn.

No New Jersey authority supports this theory of recovery. Elsewhere, it has been suggested that the imposition of such a legal duty should depend on an employer’s misfeasance, as opposed to nonfeasance, namely, whether the employer’s affirmative action has created a foreseeable risk that harm might occur once the employee is outside the scope of his or her employment, and whether the fatigue arose out of, and in the course of, employment. Out-of-state authorities rely on a variety of factors in articulating the nature of an employer’s duty to third parties, none of which are implicated here.

The summary judgment record discloses that Habina’s drivers generally drove eight to nine hours a day, ending work in the early afternoon, therefore, affording Keenan a 14-hour break between driving shifts. Moreover, Habina neither violated company policy nor required Keenan to work extra hours. Nothing in the record indicates that company officials were aware of the number of hours of sleep Keenan was getting or that Keenan was fatigued. There is no evidence that Keenan ever asked to go home and was refused, or that he fell asleep at the job site, or that any of Habina’s employees had had automobile accidents while driving home after working long hours. And finally, there was an extended gap of seven hours between when Keenan left work and the accident, during which time he voluntarily became intoxicated.

Under the circumstances, in the absence of any affirmative action on the employer’s part that might have reasonably created a foreseeable risk of harm to others once Keenan left the job site, the appellate panel declined to impose on Habina any legal duty to plaintiffs.

As to Farrell’s liability, even if evidence of a cell phone conversation between Keenan and his wife could sustain a finding of Keenan’s presence at Farrell’s, the proof is utterly wanting of Keenan’s consumption of alcohol or his display of visible signs of intoxication. The appellate panel found that neither Farrell’s service of alcohol to Keenan nor Keenan’s visible intoxication at the time could reasonably and legitimately be deduced from the evidence. As such, reasonable minds could not find these necessary statutory elements to impose dram shop liability on Farrell’s. The panel vacated the judgment against Farrell’s and remanded for a retrial of liability allocation between the remaining defendants.

Finally, the appellate panel found the jury’s economic-loss award not shocking to the judicial conscience. The panel found no error in the court’s instruction on damages and a clear basis in the record to sustain the award.

— By Debra McLoughlin

For appellants/cross-respondents — Richard Grungo Jr. (Archer & Greiner). For respondent/cross-appellant Brad’s Red Tavern Inc., t/a Farrell’s American Bistro — L. Patrick Dacey (Bolan Jahnsen Reardon; Elizabeth A. Wilson on the brief). For respondent Glenn Habina & Sons Inc. — Tricia E. Habert (Mayfield, Turner, O’Mara, Donnelly & McBride). For respondent/cross-appellant John P. Keenan — Neal A. Thakkar (Sweeney & Sheehan). Respondent Wyfre Inc., t/a Naylor’s Liquor & Bar has not filed a brief.